Taxation and household labour supply

Nezih Guner, Remzi Kaygusuz, Gustavo Ventura

Research output: Contribution to journalArticle

54 Citations (Scopus)

Abstract

We evaluate reforms to the U.S. tax system in a life cycle set-up with heterogeneous married and single households and with an operative extensive margin in labour supply. We restrict our model with observations on gender and skill premia, labour-force participation of married females across skill groups, children, and the structure of marital sorting. We concentrate on two revenue-neutral tax reforms: a proportional income tax and a reform in which married individuals file taxes separately (separate filing). Our findings indicate that tax reforms are accompanied by large increases in labour supply that differ across demographic groups, with the bulk of the increase coming from married females. Under a proportional income tax reform, married females account for more than 50% of the changes in hours across steady states, while under separate filing reform, married females account for all the change in hours.

Original languageEnglish (US)
Article numberrdr049
Pages (from-to)1113-1149
Number of pages37
JournalReview of Economic Studies
Volume79
Issue number3
DOIs
StatePublished - Jul 2012

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Taxation
Household labor supply
Labor supply
Tax reform
Demographics
Sorting
Household
Extensive margin
Income tax reform
Labor force participation
Income tax
Tax
Tax system
Life cycle
Revenue

Keywords

  • Labour force participation
  • Taxation
  • Two-earner households

ASJC Scopus subject areas

  • Economics and Econometrics

Cite this

Taxation and household labour supply. / Guner, Nezih; Kaygusuz, Remzi; Ventura, Gustavo.

In: Review of Economic Studies, Vol. 79, No. 3, rdr049, 07.2012, p. 1113-1149.

Research output: Contribution to journalArticle

Guner, Nezih ; Kaygusuz, Remzi ; Ventura, Gustavo. / Taxation and household labour supply. In: Review of Economic Studies. 2012 ; Vol. 79, No. 3. pp. 1113-1149.
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