Taxation and Labor Supply of Married Couples Across Countries: A Macroeconomic Analysis
By Alexander Bick, N. Fuchs-Schündeln. Social Science Research Network, 2018
125 citations recorded by the source corpus.
We document contemporaneous differences in the aggregate labor supply of married couples across 17 European countries and the US. Based on a model of joint household decision making, we quantify the contribution of international differences in non-linear labor income taxes and consumption taxes to the international differences in hours worked in the data. Through the lens of the model, taxes, together with wages and the educational composition, account for a significant part of the small differences in married men's and the large differences in married women's hours worked in the data. Taking the full nonlinearities of labor income tax codes, including the tax treatment of married couples, into account is crucial for generating the low cross-country correlation between married men's and women's hours worked in the data, and for explaining the variation of married women's hours worked across European countries.
Subfields: Accounting, Economics and Econometrics, Gender Studies
View Paper: https://www.semanticscholar.org/paper/a203587dd3194252fe4e1b943d97795d7a7bb08e
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Citations in the corpus
- How Do Hours Worked Vary with Income? Cross-Country Evidence and Implications (2018, background): “…of the U.S.-Europe gap in average hours have focused largely on differences in taxation (e.g., Prescott, 2004; Rogerson, 2006; McDaniel, 2011; Bick and Fuchs-Schündeln, 2017), institutions (Alesina et al., 2005) and social security systems (Erosa et al., 2012; Wallenius, 2013; Alonso-Ortiz,…”