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The lock-in effect of marriage: Work incentives after saying, “Yes, I do.â€

Author

Listed:
  • Michael Christl

    (European Commission, Joint Research Centre (JRC-Seville))

  • Silvia De Poli

    (European Commission, Joint Research Centre (JRC-Seville))

  • Viginta Ivaskaite-Tamosiune

    (European Commission, Joint Research Centre (JRC-Seville))

Abstract

In this paper, we use EUROMOD, the tax-benefit microsimulation model of the European Union,to investigate the impact of marriage-related tax-benefit instruments on the labour supply of married couples. For each married partner, we estimate their individual marginal effective tax rateand net replacement rate before and after marriage. We show that the marriage bonus, which iseconomically significant in eight European countries, decreases the work incentives for womenand, particularly, on the intensive margin. In contrast, the incentives on the intensive marginincrease for men once they are married, pointing to the marriage-biased and gender-biased taxbenefit structures in the analysed countries. Our results suggest that marriage bonuses contributeto a lock-in effect, where second earners, typically women, are incentivised to work less, withnegative economic consequences.

Suggested Citation

  • Michael Christl & Silvia De Poli & Viginta Ivaskaite-Tamosiune, 2022. "The lock-in effect of marriage: Work incentives after saying, “Yes, I do.â€," Working Papers 615, ECINEQ, Society for the Study of Economic Inequality.
    • Handle: RePEc:inq:inqwps:ecineq2022-615
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • 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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