Abstract
We document the time-series of employment rates and hours worked per employed by married couples in the US and seven European countries (Belgium, France, Germany, Italy, the Netherlands, Portugal, and the UK) from the early 1980s through 2016. Relying on a model of joint household labor supply decisions, we quantitatively analyze the role of non-linear labor income taxes for explaining the evolution of hours worked of married couples over time, using as inputs the full country- and year-specific statutory labor income tax codes. We further evaluate the role of consumption taxes, gender and educational wage premia, and the educational composition. The model is quite successful in replicating the time series behavior of hours worked per employed married woman, with labor income taxes being the key driving force. It does however capture only part of the secular increase in married women's employment rates in the 1980s and early 1990s, suggesting an important role for factors not considered in this paper. An independent and important contribution of the paper is that we make the non-linear tax codes used as an input into the analysis available as a user-friendly and easily integrable set of Matlab codes.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 44-62 |
| Number of pages | 19 |
| Journal | Journal of International Economics |
| Volume | 118 |
| DOIs | |
| State | Published - May 1 2019 |
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Keywords
- Hours worked
- Taxation
- Two-earner households
ASJC Scopus subject areas
- Finance
- Economics and Econometrics
Cite this
Long-term changes in married couples’ labor supply and taxes : Evidence from the US and Europe since the 1980s. / Bick, Alexander; Brüggemann, Bettina; Fuchs-Schündeln, Nicola; Paule-Paludkiewicz, Hannah.
In: Journal of International Economics, Vol. 118, 01.05.2019, p. 44-62.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Long-term changes in married couples’ labor supply and taxes
T2 - Evidence from the US and Europe since the 1980s
AU - Bick, Alexander
AU - Brüggemann, Bettina
AU - Fuchs-Schündeln, Nicola
AU - Paule-Paludkiewicz, Hannah
PY - 2019/5/1
Y1 - 2019/5/1
N2 - We document the time-series of employment rates and hours worked per employed by married couples in the US and seven European countries (Belgium, France, Germany, Italy, the Netherlands, Portugal, and the UK) from the early 1980s through 2016. Relying on a model of joint household labor supply decisions, we quantitatively analyze the role of non-linear labor income taxes for explaining the evolution of hours worked of married couples over time, using as inputs the full country- and year-specific statutory labor income tax codes. We further evaluate the role of consumption taxes, gender and educational wage premia, and the educational composition. The model is quite successful in replicating the time series behavior of hours worked per employed married woman, with labor income taxes being the key driving force. It does however capture only part of the secular increase in married women's employment rates in the 1980s and early 1990s, suggesting an important role for factors not considered in this paper. An independent and important contribution of the paper is that we make the non-linear tax codes used as an input into the analysis available as a user-friendly and easily integrable set of Matlab codes.
AB - We document the time-series of employment rates and hours worked per employed by married couples in the US and seven European countries (Belgium, France, Germany, Italy, the Netherlands, Portugal, and the UK) from the early 1980s through 2016. Relying on a model of joint household labor supply decisions, we quantitatively analyze the role of non-linear labor income taxes for explaining the evolution of hours worked of married couples over time, using as inputs the full country- and year-specific statutory labor income tax codes. We further evaluate the role of consumption taxes, gender and educational wage premia, and the educational composition. The model is quite successful in replicating the time series behavior of hours worked per employed married woman, with labor income taxes being the key driving force. It does however capture only part of the secular increase in married women's employment rates in the 1980s and early 1990s, suggesting an important role for factors not considered in this paper. An independent and important contribution of the paper is that we make the non-linear tax codes used as an input into the analysis available as a user-friendly and easily integrable set of Matlab codes.
KW - Hours worked
KW - Taxation
KW - Two-earner households
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UR - http://www.scopus.com/inward/citedby.url?scp=85062355821&partnerID=8YFLogxK
U2 - 10.1016/j.jinteco.2019.01.014
DO - 10.1016/j.jinteco.2019.01.014
M3 - Article
AN - SCOPUS:85062355821
VL - 118
SP - 44
EP - 62
JO - Journal of International Economics
JF - Journal of International Economics
SN - 0022-1996
ER -