Is the Household Demand for In-Home Services Sensitive to Tax Reductions? The French Case
AbstractOur paper is concerned with the impact of tax reductions on the demand for services in the home. For that purpose, we consider the particular case of the French legislation voted in 1991. This law allows households employing paid help in the home to deduct from their income tax 50% of the sums paid out, subject to an annual ceiling. Did the reduction in overall cost of jobs in the form of services to individuals stimulate the household demand for these services? To analyse this problem, we estimate a structural model of demand for in-home services by using household individual data collected by INSEE (Paris) in 1996. Our estimations show that the relative marginal effect of a price variation on the probability of a strictly positive demand for in-home services is negative; its absolute value decreases with the educational level and with the income level of the household. It is generally higher for households without children less than 6 years old. These results suggest that a differentiated tax reduction, varying with the household income level and with the presence of young children in the household, should have a higher effect on the demand for in-home services than a uniform tax credit, such as the one granted in France since 1991.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 2577.
Date of creation: Oct 2000
Date of revision:
Contact details of provider:
Postal: Centre for Economic Policy Research, 77 Bastwick Street, London EC1V 3PZ
Phone: 44 - 20 - 7183 8801
Fax: 44 - 20 - 7183 8820
Other versions of this item:
- Flipo, Anne & Fougere, Denis & Olier, Lucile, 2007. "Is the household demand for in-home services sensitive to tax reductions? The French case," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 365-385, February.
- Flipo, Anne & Fougère, Denis & Olier, Lucile, 2004. "Is the Household Demand for In-Home Services Sensitive to Tax Reductions? The French Case," IZA Discussion Papers 1392, Institute for the Study of Labor (IZA).
- D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
- J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Thomas Piketty, 1998. "L'emploi dans les services en France et aux États-Unis : une analyse structurelle sur longue période," Économie et Statistique, Programme National Persée, vol. 318(1), pages 73-99.
- Nyman, John A & Bricker, Dennis L, 1989. "Profit Incentives and Technical Efficiency in the Production of Nursing Home Care," The Review of Economics and Statistics, MIT Press, vol. 71(4), pages 586-94, November.
- Averett, S.L. & Peters, H.E. & Waldman, D.M., 1992.
"Tax Credits, Labor Supply, and Child Care,"
University of Chicago - Economics Research Center
92-9, Chicago - Economics Research Center.
- Susan L. Averett & H. Elizabeth Peters & Donald M. Waldman, . "Tax Credits, Labor Supply, and Child Care," University of Chicago - Population Research Center 92-9a, Chicago - Population Research Center.
- Vassilis A. Hajivassiliou, 1991. "Simulation Estimation Methods for Limited Dependent Variable Models," Cowles Foundation Discussion Papers 1007, Cowles Foundation for Research in Economics, Yale University.
- Gertler, Paul J & Waldman, Donald M, 1992. "Quality-Adjusted Cost Functions and Policy Evaluation in the Nursing Home Industry," Journal of Political Economy, University of Chicago Press, vol. 100(6), pages 1232-56, December.
- Jean Kimmel, 1998. "Child Care Costs As A Barrier To Employment For Single And Married Mothers," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 287-299, May.
- Keane, Michael P, 1994. "A Computationally Practical Simulation Estimator for Panel Data," Econometrica, Econometric Society, vol. 62(1), pages 95-116, January.
- Didier Blanchet, 1994. "Transferts fiscaux, répartition du revenu et équilibre des emplois de service," Économie et Prévision, Programme National Persée, vol. 115(4), pages 85-91.
- David M. Blau & Alison P. Hagy, 1998. "The Demand for Quality in Child Care," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 104-146, February.
- Fakih, Ali & Marrouch, Walid, 2012. "Determinants of Domestic Workers' Employment: Evidence from Lebanese Household Survey Data," IZA Discussion Papers 6822, Institute for the Study of Labor (IZA).
- Stancanelli, Elena G. F. & Stratton, Leslie S., 2010. "Her Time, His Time, or the Maid's Time: An Analysis of the Demand for Domestic Work," IZA Discussion Papers 5253, Institute for the Study of Labor (IZA).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.