Why are Mothers Working Longer Hours in Austria than in Germany? A Comparative Micro Simulation Analysis
Labor force participation rates of mothers in Austria and Germany are similar, however full-time employment rates are much higher among Austrian mothers. In order to find out to what extent these differences can be attributed to differences in the tax transfer-system, we perform a comparative micro simulation exercise. After estimating structural labor supply models of both countries, we interchange two important institutional characteristics of the two countries, namely (i) the definition of the tax unit within the personal income tax and (ii) the parental leave benefit scheme. As our analysis shows, differences in mothers’ employment patterns can partly be explained by the different tax systems: While Germany has a system of joint taxation with income splitting for married couples, Austria taxes everyone individually, which leads to lower marginal tax rates for secondary earners than the German system.
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- Viktor Steiner & Katharina Wrohlich, 2004.
"Household Taxation, Income Splitting and Labor Supply Incentives – A Microsimulation Study for Germany,"
CESifo Economic Studies,
CESifo, vol. 50(3), pages 541-568.
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- Katharina Wrohlich, 2008. "The excess demand for subsidized child care in Germany," Applied Economics, Taylor & Francis Journals, vol. 40(10), pages 1217-1228.
- Katharina Wrohlich, 2005. "The Excess Demand for Subsidized Child Care in Germany," Discussion Papers of DIW Berlin 470, DIW Berlin, German Institute for Economic Research.
- Wrohlich, Katharina, 2005. "The Excess Demand for Subsidized Child Care in Germany," IZA Discussion Papers 1515, Institute for the Study of Labor (IZA).
- Peter Haan, 2006. "Much ado about nothing: conditional logit vs. random coefficient models for estimating labour supply elasticities," Applied Economics Letters, Taylor & Francis Journals, vol. 13(4), pages 251-256.
- Viktor Steiner & Katharina Wrohlich, 2006. "Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution and Work Incentives," Discussion Papers of DIW Berlin 612, DIW Berlin, German Institute for Economic Research.
- Steiner, Viktor & Wrohlich, Katharina, 2006. "Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution and Work Incentives?," IZA Discussion Papers 2245, Institute for the Study of Labor (IZA).
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