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Taxes and the Two-Earner Family: Impact On the Work Decision

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  • Jane H. Leuthold

    (University of Illinois)

Abstract

Data from the National Longitudinal Survey for 1970 are used to provide some new empirical estimates of the effect of changes in the marginal rates of income and payroll taxation on the hours worked by two-earner families. A family labor supply madel incorporating tax and nontax parameters is estimated using Aitken's generalized least squares estimator for seemingly unrelated equations. The results of the study show that the tax structure is a significant factor in the work decision of the two-earner family and that changes in the marginal rate of tax can be expected to cause a realignment of work responsibilities within the family.

Suggested Citation

  • Jane H. Leuthold, 1979. "Taxes and the Two-Earner Family: Impact On the Work Decision," Public Finance Review, , vol. 7(2), pages 147-161, April.
    • Handle: RePEc:sae:pubfin:v:7:y:1979:i:2:p:147-161
    DOI: 10.1177/109114217900700202
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    References listed on IDEAS

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    1. Wales, Terence J, 1973. "Estimation of a Labor Supply Curve for Self-Employed Business Proprietors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(1), pages 69-80, February.
    2. Parnes, Herbert S, 1975. "The National Longitudinal Surveys: New Vistas for Labor Market Research," American Economic Review, American Economic Association, vol. 65(2), pages 244-249, May.
    3. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-694, July.
    4. Rosen, Harvey S, 1976. "Tax Illusion and the Labor Supply of Married Women," The Review of Economics and Statistics, MIT Press, vol. 58(2), pages 167-172, May.
    5. Jane H. Leuthold, 1968. "An Empirical Study of Formula Income Transfers and the Work Decision of the Poor," Journal of Human Resources, University of Wisconsin Press, vol. 3(3), pages 312-323.
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    1. Amadeo Fuenmayor & Rafael Granell & Mauro Mediavilla, 2018. "The effects of separate taxation on labor participation of married couples. An empirical analysis using propensity score," Review of Economics of the Household, Springer, vol. 16(2), pages 541-561, June.

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