TY - JOUR
T1 - Taxes and marriage
T2 - A two-sided search analysis
AU - Chade, Hector
AU - Ventura, Gustavo
PY - 2002/8
Y1 - 2002/8
N2 - This article analyzes the effects of differential tax treatment of married and single individuals in the United States on marriage formation and composition, divorce, and labor supply. We develop a marriage-market model with search frictions and heterogeneous agents that is sufficiently rich to capture key elements of the problem under consideration. We then calibrate the model and use it to evaluate the quantitative effects of several tax reforms aimed at making the tax law neutral with respect to marital status. We find that these reforms (i) systematically increase the labor supply of married females, with changes ranging from 0.3 to 10.1 percent; (ii) have substantial effects on the correlation of spouses' incomes, which changes from 0.2 to values between 0.185 and 0.334; (iii) can lead to either an increase or decrease in the fraction of people married, with changes that range from -0.6 to 2.4 percent.
AB - This article analyzes the effects of differential tax treatment of married and single individuals in the United States on marriage formation and composition, divorce, and labor supply. We develop a marriage-market model with search frictions and heterogeneous agents that is sufficiently rich to capture key elements of the problem under consideration. We then calibrate the model and use it to evaluate the quantitative effects of several tax reforms aimed at making the tax law neutral with respect to marital status. We find that these reforms (i) systematically increase the labor supply of married females, with changes ranging from 0.3 to 10.1 percent; (ii) have substantial effects on the correlation of spouses' incomes, which changes from 0.2 to values between 0.185 and 0.334; (iii) can lead to either an increase or decrease in the fraction of people married, with changes that range from -0.6 to 2.4 percent.
UR - http://www.scopus.com/inward/record.url?scp=0036686513&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=0036686513&partnerID=8YFLogxK
U2 - 10.1111/1468-2354.t01-1-00043
DO - 10.1111/1468-2354.t01-1-00043
M3 - Article
AN - SCOPUS:0036686513
SN - 0020-6598
VL - 43
SP - 955
EP - 985
JO - International Economic Review
JF - International Economic Review
IS - 3
ER -