Does Income Taxation Affect Partners’ Household Chores?

A.H.O. van Soest, E.G.F. Stancanelli

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Abstract

We study the impact of income taxation on both partners‟ allocation of time to market work and unpaid house work in households with two adults. We estimate a structural household utility model in which the marginal utilities of leisure and house work of both partners are modelled as random coefficients, depending on observed and unobserved characteristics of the household and the two partners. We use a discrete choice model with choice sets of 2,401 points for each couple, distinguishing seven market work intervals and seven house work intervals for each partner. The model is estimated using data for France, which taxes incomes of married couples jointly, like, for instance, Germany and the US. We find that both partners‟ market and non-market time allocation decisions are responsive to changes in the tax system or other policy changes that change the financial incentives. Women‟s time allocation is more responsive to the own and the partner‟s wage rate than men‟s. Tax policy simulations suggest that moving from joint taxation for married couples to separate taxation of each spouse would go a small step in the direction of equalizing market and non-market work of spouses. Selective taxation with smaller tax rates for women than for men would magnify these effects.
Original languageEnglish
Place of PublicationTilburg
PublisherEconometrics
Number of pages41
Volume2010-76
Publication statusPublished - 2010

Publication series

NameCentER Discussion Paper
Volume2010-76

Fingerprint

Household
Housework
Taxation
Income taxation
Spouses
Market work
Time allocation
Tax system
Leisure
Tax policy
Policy change
Marginal utility
Tax rate
Time to market
Germany
Policy simulation
Discrete choice models
Wage rate
Random coefficients
Financial incentives

Keywords

  • time use
  • taxation
  • labour supply
  • discrete choice models

Cite this

van Soest, A. H. O., & Stancanelli, E. G. F. (2010). Does Income Taxation Affect Partners’ Household Chores? (CentER Discussion Paper; Vol. 2010-76). Tilburg: Econometrics.
van Soest, A.H.O. ; Stancanelli, E.G.F. / Does Income Taxation Affect Partners’ Household Chores?. Tilburg : Econometrics, 2010. (CentER Discussion Paper).
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van Soest, AHO & Stancanelli, EGF 2010 'Does Income Taxation Affect Partners’ Household Chores?' CentER Discussion Paper, vol. 2010-76, Econometrics, Tilburg.

Does Income Taxation Affect Partners’ Household Chores? / van Soest, A.H.O.; Stancanelli, E.G.F.

Tilburg : Econometrics, 2010. (CentER Discussion Paper; Vol. 2010-76).

Research output: Working paperDiscussion paperOther research output

TY - UNPB

T1 - Does Income Taxation Affect Partners’ Household Chores?

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AU - Stancanelli, E.G.F.

N1 - Pagination: 41

PY - 2010

Y1 - 2010

N2 - We study the impact of income taxation on both partners‟ allocation of time to market work and unpaid house work in households with two adults. We estimate a structural household utility model in which the marginal utilities of leisure and house work of both partners are modelled as random coefficients, depending on observed and unobserved characteristics of the household and the two partners. We use a discrete choice model with choice sets of 2,401 points for each couple, distinguishing seven market work intervals and seven house work intervals for each partner. The model is estimated using data for France, which taxes incomes of married couples jointly, like, for instance, Germany and the US. We find that both partners‟ market and non-market time allocation decisions are responsive to changes in the tax system or other policy changes that change the financial incentives. Women‟s time allocation is more responsive to the own and the partner‟s wage rate than men‟s. Tax policy simulations suggest that moving from joint taxation for married couples to separate taxation of each spouse would go a small step in the direction of equalizing market and non-market work of spouses. Selective taxation with smaller tax rates for women than for men would magnify these effects.

AB - We study the impact of income taxation on both partners‟ allocation of time to market work and unpaid house work in households with two adults. We estimate a structural household utility model in which the marginal utilities of leisure and house work of both partners are modelled as random coefficients, depending on observed and unobserved characteristics of the household and the two partners. We use a discrete choice model with choice sets of 2,401 points for each couple, distinguishing seven market work intervals and seven house work intervals for each partner. The model is estimated using data for France, which taxes incomes of married couples jointly, like, for instance, Germany and the US. We find that both partners‟ market and non-market time allocation decisions are responsive to changes in the tax system or other policy changes that change the financial incentives. Women‟s time allocation is more responsive to the own and the partner‟s wage rate than men‟s. Tax policy simulations suggest that moving from joint taxation for married couples to separate taxation of each spouse would go a small step in the direction of equalizing market and non-market work of spouses. Selective taxation with smaller tax rates for women than for men would magnify these effects.

KW - time use

KW - taxation

KW - labour supply

KW - discrete choice models

M3 - Discussion paper

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BT - Does Income Taxation Affect Partners’ Household Chores?

PB - Econometrics

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van Soest AHO, Stancanelli EGF. Does Income Taxation Affect Partners’ Household Chores? Tilburg: Econometrics. 2010. (CentER Discussion Paper).