Abstract
Based on well-known evidence on labor supply elasticities, several authors have
concluded that women should be taxed at lower rates than men. We evaluate the
quantitative implications and merits of this proposition. Relative to the current system of taxation, setting a proportional tax rate on married females equal to 4% (8%) increases output and married female labor force participation by about 3.9% (3.4%) and 6.9% (4.0%), respectively. Gender-based taxes improve welfare and are preferred by a majority of households. Nevertheless, welfare gains are higher when the U.S. tax system is replaced by a proportional, gender-neutral income tax.
concluded that women should be taxed at lower rates than men. We evaluate the
quantitative implications and merits of this proposition. Relative to the current system of taxation, setting a proportional tax rate on married females equal to 4% (8%) increases output and married female labor force participation by about 3.9% (3.4%) and 6.9% (4.0%), respectively. Gender-based taxes improve welfare and are preferred by a majority of households. Nevertheless, welfare gains are higher when the U.S. tax system is replaced by a proportional, gender-neutral income tax.
| Original language | English |
|---|---|
| Pages (from-to) | 111-128 |
| Journal | Journal of Monetary Economics |
| Volume | 59 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - Jan 2012 |
| Externally published | Yes |
Keywords
- Taxation
- Two-earner households
- Labor force participation