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Tax Structure and Female Labour Market Participation: Evidence from Ireland

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  • Tim Callan

    (Economic and Social Research Institute (ESRI))

  • A. Van Soest

    (RAND, Tilburg University)

  • John R. Walsh

    (Economic and Social Research Institute (ESRI))

Abstract

How great an effect does the structure of income taxes have on women's labour market participation? This issue is investigated using a discrete choice static labour supply model for married couples in Ireland. The model incorporates fixed costs of working and simultaneously explains participation decisions and preferred hours of work. Details of the tax system are fully incorporated, and key elements of the welfare system are also taken into account. The model is estimated using data from the 1994 wave of the Living in Ireland Survey. The results are used to analyse the labour supply effects of a move to greater independence in the tax treatment of couples. The influence of tax structure on participation is reconsidered in the light of trends in women's participation in the labour market and two key changes in the structure of taxation: a shift from a joint or aggregated basis of assessment to an ?income-splitting? system in 1980 and a further substantial shift from income-splitting towards greater independence from 2000 onwards.

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Bibliographic Info

Paper provided by Economic and Social Research Institute (ESRI) in its series Papers with number WP208.

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Length: 33 pages
Date of creation: Sep 2007
Date of revision:
Handle: RePEc:esr:wpaper:wp208

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Citations

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Cited by:
  1. Olivier Bargain & Tim Callan, 2007. "Analysing the Effects of Tax-benefit Reforms on Income Distribution - A Decomposition Approach," Working Papers 200713, School Of Economics, University College Dublin.
  2. Selin, Håkan, 2009. "The Rise in Female Employment and the Role of Tax Incentive. An Empirical Analysis of the Swedish Individual Tax Reform of 1971," Working Paper Series, Center for Fiscal Studies 2009:3, Uppsala University, Department of Economics.
  3. Michael Anyadike-Danes & Helena Lenihan & Mike Hart, 2009. "New Business Formation: An Important Element of Ireland's Rapid Growth Experience?," ESRC Centre for Business Research - Working Papers wp380, ESRC Centre for Business Research.

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