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Taxing Families: The Impact of Child-related Transfers on Maternal Labor Supply

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  • Anne Hannusch

Abstract

The employment rate of married women with and without pre-school children varies substantially across countries. To what extent can child-related transfers account for this variation? I develop a life-cycle model in which married couples jointly decide their labor supply, female human capital evolves endogenously, and some couples have access to grandparental childcare. I show that child-related transfers can explain most of the variation in the employment rates of married women, even after taking the labor income tax treatment and cross-country variation in childcare fees into account.

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  • Anne Hannusch, 2019. "Taxing Families: The Impact of Child-related Transfers on Maternal Labor Supply," CRC TR 224 Discussion Paper Series crctr224_2019_067v2, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2019_067v2
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp067
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    Cited by:

    1. Doepke, Matthias & Hannusch, Anne & Kindermann, Fabian & Tertilt, Michèle, 2022. "The Economics of Fertility: A New Era," IZA Discussion Papers 15224, Institute of Labor Economics (IZA).
    2. Andre Luduvice, 2021. "The Macroeconomic Effects of Universal Basic Income Programs," Working Papers 21-21, Federal Reserve Bank of Cleveland.
    3. Alon, Titan & Doepke, Matthias & Olmstead-Rumsey, Jane & Tertilt, Michèle, 2020. "This Time It's Different: The Role of Women's Employment in a Pandemic Recession," IZA Discussion Papers 13562, Institute of Labor Economics (IZA).
    4. Das, Debasmita, 2022. "Child-rearing, Social Security and Married Women’s Labor Supply over the Life Cycle," MPRA Paper 117614, University Library of Munich, Germany, revised 10 Sep 2022.
    5. Oliwia Komada, 2023. "Raising America's future: search for optimal child-related transfers," GRAPE Working Papers 84, GRAPE Group for Research in Applied Economics.
    6. Tertilt, Michèle & Doepke, Matthias & Olmstead-Rumsey, Jane, 2020. "This Time It’s Different: The Role of Women’s Employment in a Pandemic Recession," CEPR Discussion Papers 15149, C.E.P.R. Discussion Papers.

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    More about this item

    Keywords

    Maternal Labor Supply; Nonlinear Transfers; Taxation; Two-earner Households;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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