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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 do 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.

Suggested Citation

  • Anne Hannusch, 2019. "Taxing Families: The Impact of Child-related Transfers on Maternal Labor Supply," CRC TR 224 Discussion Paper Series crctr224_2019_067v3, University of Bonn and University of Mannheim, Germany, revised May 2025.
    • Handle: RePEc:bon:boncrc:crctr224_2019_067v3
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp067
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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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