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The Rise in Female Employment and the Role of Tax Incentives - An Empirical Analysis of the Swedish Individual Tax Reform of 1971

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  • Håkan Selin

Abstract

Sweden reached the 2007 OECD average level of female labor force participation already in 1974. Before, but not after, 1971 the average tax rate facing the housewife was a function of the income of her husband. By exploiting a rich register based data source I utilize the exogenous variation provided by the individual tax reform to analyze the evolution of female employment in Sweden in the beginning of the 1970’s. Simulations suggest that employment among married women would have been 10 percentage points lower in 1975 if the 1969 statutory income tax system still had been in place in 1975.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2009/wp-cesifo-2009-04/cesifo1_wp2629.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2629.

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Date of creation: 2009
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Handle: RePEc:ces:ceswps:_2629

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Keywords: female labor supply; income tax reforms;

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References

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  1. Bradley T. Heim, 2007. "The Incredible Shrinking Elasticities: Married Female Labor Supply, 1978–2002," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
  2. Per-Anders Edin & Bertil Holmlund, 1995. "The Swedish Wage Structure: The Rise and Fall of Solidarity Wage Policy?," NBER Chapters, in: Differences and Changes in Wage Structures, pages 307-344 National Bureau of Economic Research, Inc.
  3. Edin, Per-Anders & Fredriksson, Peter, 2000. "LINDA - Longitudinal INdividual DAta for Sweden," Working Paper Series 2000:19, Uppsala University, Department of Economics.
  4. Viktor Steiner & Katharina Wrohlich, 2007. "Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution, Work Incentives and Household Welfare?," SOEPpapers on Multidisciplinary Panel Data Research 44, DIW Berlin, The German Socio-Economic Panel (SOEP).
  5. Sören Blomquist & Håkan Selin, 2009. "Hourly Wage Rate and Taxable Labor Income Responsiveness to Changes in Marginal Tax Rates," CESifo Working Paper Series 2644, CESifo Group Munich.
  6. Thomas F. Crossley & Sung-Hee Jeon, 2006. "Joint Taxation and the Labour Supply of Married Women: Evidence from the Canadian Tax Reform of 1988," Quantitative Studies in Economics and Population Research Reports 404, McMaster University.
  7. Richard Blundell & Alan Duncan & Costas Meghir, 1995. "Estimating labour supply responses using tax reforms," IFS Working Papers W95/07, Institute for Fiscal Studies.
  8. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  9. Pencavel, John, 1998. "Assortative Mating by Schooling and the Work Behavior of Wives and Husbands," American Economic Review, American Economic Association, vol. 88(2), pages 326-29, May.
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  14. Åsa Hansson, 2007. "Taxpayers' responsiveness to tax rate changes and implications for the cost of taxation in Sweden," International Tax and Public Finance, Springer, vol. 14(5), pages 563-582, October.
  15. Tim Callan & A. Van Soest & John R. Walsh, 2007. "Tax Structure and Female Labour Market Participation: Evidence from Ireland," Papers WP208, Economic and Social Research Institute (ESRI).
  16. Gustafsson, Siv & Jacobsson, Roger, 1985. "Trends in Female Labor Force Participation in Sweden," Journal of Labor Economics, University of Chicago Press, vol. 3(1), pages S256-74, January.
  17. Sara LaLumia, 2006. "The Effects of Joint Taxation of Married Couples on Labor Supply and Non-wage Income," Working Papers 28, Department of Economics, College of William and Mary.
  18. Nada Eissa & Jeffrey B. Liebman, 1995. "Labor Supply Response to the Earned Income Tax Credit," NBER Working Papers 5158, National Bureau of Economic Research, Inc.
  19. Richard B. Freeman & Lawrence F. Katz, 1995. "Differences and Changes in Wage Structures," NBER Books, National Bureau of Economic Research, Inc, number free95-1, October.
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  21. Florence Jaumotte, 2003. "Labour Force Participation of Women: Empirical Evidence on The Role of Policy and Other Determinants in OECD Countries," OECD Economic Studies, OECD Publishing, vol. 2003(2), pages 51-108.
  22. Klevmarken, N Anders, 2000. "Did the Tax Cuts Increase Hours of Work? A Statistical Analysis of a Natural Experiment," Kyklos, Wiley Blackwell, vol. 53(3), pages 337-62.
  23. Gustafsson, Siv, 1992. "Separate Taxation and Married Women's Labor Supply: A Comparison of West Germany and Sweden," Journal of Population Economics, Springer, vol. 5(1), pages 61-85, February.
  24. Nina Smith & Shirley Dex & Jan Dirk Vlasblom & Tim Callan, 2003. "The effects of taxation on married women's labour supply across four countries," Oxford Economic Papers, Oxford University Press, vol. 55(3), pages 417-439, July.
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Cited by:
  1. Stefan Hochguertel & Henry Ohlsson, 2012. "Who is at the Top? Wealth Mobility over the Life Cycle," Tinbergen Institute Discussion Papers 12-004/3, Tinbergen Institute.
  2. Forslund, Anders & Fredriksson, Peter, 2009. "Income support systems, labour supply incentives and employment – some cross-country evidence," Working Paper Series 2009:32, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  3. Avdic, Daniel & Johansson, Per, 2013. "Gender Differences in Preferences for Health-Related Absences from Work," IZA Discussion Papers 7480, Institute for the Study of Labor (IZA).
  4. Angelov, Nikolay & Johansson, Per & Lindahl, Erica, 2013. "Gender differences in sickness absence and the gender division of family responsibilities," Working Paper Series 2013:9, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  5. Stefan Hochguertel & Henry Ohlsson, 2011. "Wealth mobility and dynamics over entire individual working life cycles," BCL working papers 56, Central Bank of Luxembourg.
  6. Angelov, Nikolay & Johansson, Per & Lindahl, Erica, 2013. "Is the persistent gender gap in income and wages due to unequal family responsibilities?," Working Paper Series, Center for Labor Studies 2013:3, Uppsala University, Department of Economics.
  7. Forslund, Anders, 2009. "Labour supply incentives, income support systems and taxes in Sweden," Working Paper Series 2009:30, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  8. Klara Kaliskova, 2013. "Family Taxation and the Female Labor Supply: Evidence from the Czech Republic," CERGE-EI Working Papers wp496, The Center for Economic Research and Graduate Education - Economic Institute, Prague.

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