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.
|Date of creation:||Jun 2007|
|Date of revision:|
|Publication status:||published in: Fiscal Studies, 2007, 28 (4), 463-495|
|Contact details of provider:|| Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany|
Phone: +49 228 3894 223
Fax: +49 228 3894 180
Web page: http://www.iza.org
|Order Information:|| Postal: IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Viktor Steiner & Katharina Wrohlich, 2004.
"Household Taxation, Income Splitting and Labor Supply Incentives: A Microsimulation Study for Germany,"
Discussion Papers of DIW Berlin
421, DIW Berlin, German Institute for Economic Research.
- 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.
- 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.
- Katharina Wrohlich, 2008. "The excess demand for subsidized child care in Germany," Applied Economics, Taylor & Francis Journals, vol. 40(10), pages 1217-1228.
- Wrohlich, Katharina, 2005. "The Excess Demand for Subsidized Child Care in Germany," IZA Discussion Papers 1515, Institute for the Study of Labor (IZA).
- Richard Blundell & Thomas MaCurdy, 1998.
"Labour supply: a review of alternative approaches,"
IFS Working Papers
W98/18, Institute for Fiscal Studies.
- 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).
- 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.
- 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.
When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp2845. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak)
If references are entirely missing, you can add them using this form.