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Taxation and Labor Supply of Married Women across Countries: A Macroeconomic Analysis

Author

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  • Nicola Fuchs-Schündeln

    (Goethe University Frankfurt /Main)

  • Alexander Bick

    (Arizona State University)

Abstract

We document contemporaneous differences in the aggregate labor supply of married couples across 18 OECD countries along the extensive and the intensive margin. We quantify the contribution of international differences in non-linear labor income taxes and consumption taxes, as well as gender wage gaps and educational premia, to the international differences in the data. Our model replicates the comparatively small cross-country differences of married men's hours worked very well. Moreover, taxes and wages account for a large part of the observed large differences in married women's labor supply between the US and Europe. The non-linearity of labor income taxes leads to substantially different effects of taxation on married men and women. We find that going to a system of strictly separate taxation would increase labor supply of married women by more than 100 hours annually in a third of our sample countries.

Suggested Citation

  • Nicola Fuchs-Schündeln & Alexander Bick, 2014. "Taxation and Labor Supply of Married Women across Countries: A Macroeconomic Analysis," 2014 Meeting Papers 321, Society for Economic Dynamics.
  • Handle: RePEc:red:sed014:321
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    References listed on IDEAS

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    Cited by:

    1. Doepke, M. & Tertilt, M., 2016. "Families in Macroeconomics," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 1789-1891, Elsevier.
    2. Jeremy Greenwood & Nezih Guner & Guillaume Vandenbroucke, 2017. "Family Economics Writ Large," Journal of Economic Literature, American Economic Association, vol. 55(4), pages 1346-1434, December.
    3. Fuchs-Schündeln, Nicola & Bick, Alexander & Lagakos, David, 2016. "How Do Average Hours Worked Vary with Development? Cross-Country Evidence and Implications," VfS Annual Conference 2016 (Augsburg): Demographic Change 145576, Verein für Socialpolitik / German Economic Association.

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