DP9115 Taxation and Labor Supply of Married Couples across Countries: A Macroeconomic Analysis
|Author(s):||Alexander Bick, Nicola Fuchs-Schündeln|
|Publication Date:||September 2012|
|Keyword(s):||Hours Worked, Taxation, Two-Earner Households|
|JEL(s):||E60, H20, H31, J12, J22|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=9115|
We document contemporaneous differences in the aggregate labor supply of married couples across 19 OECD countries. We quantify the contribution of international differences in non-linear labor income taxes and consumption taxes, as well as male and female wages, to the international differences in the data. Our model replicates the comparatively small differences of married men's hours worked very well. Moreover, taxes and wages account for a large part of the observed substantial differences in married women's labor supply between the US and Western, Eastern, and Northern Europe, but cannot explain the low labor supply of married women in Southern Europe.