Does Income Taxation Affect Partners' Household Chores?

42 Pages Posted: 12 Jul 2010

See all articles by Arthur van Soest

Arthur van Soest

Tilburg University; Netspar; RAND Corporation; Institute for the Study of Labor (IZA)

Elena Stancanelli

Paris School of Economics (PSE)

Abstract

We study the impact of income taxation on both partners' allocation of time to market work and unpaid house work in households with two adults. We estimate a structural household utility model in which the marginal utilities of leisure and house work of both partners are modelled as random coefficients, depending on observed and unobserved characteristics of the household and the two partners. We use a discrete choice model with choice sets of 2,401 points for each couple, distinguishing seven market work intervals and seven house work intervals for each partner. The model is estimated using data for France, which taxes incomes of married couples jointly, like, for instance, Germany and the US. We find that both partners' market and non-market time allocation decisions are responsive to changes in the tax system or other policy changes that change the financial incentives. Women's time allocation is more responsive to the own and the partner's wage rate than men's. Tax policy simulations suggest that moving from joint taxation for married couples to separate taxation of each spouse would go a small step in the direction of equalizing market and non-market work of spouses. Selective taxation with smaller tax rates for women than for men would magnify these effects.

Keywords: time use, taxation, labour supply, discrete choice models

JEL Classification: J22, H31, C35

Suggested Citation

van Soest, Arthur H. O. and van Soest, Arthur H. O. and Stancanelli, Elena, Does Income Taxation Affect Partners' Household Chores?. IZA Discussion Paper No. 5038, Available at SSRN: https://ssrn.com/abstract=1638473 or http://dx.doi.org/10.2139/ssrn.1638473

Arthur H. O. van Soest (Contact Author)

Tilburg University ( email )

P.O. Box 90153
Tilburg, DC Noord-Brabant 5000 LE
Netherlands

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

RAND Corporation ( email )

P.O. Box 2138
1776 Main Street
Santa Monica, CA 90407-2138
United States

Institute for the Study of Labor (IZA)

P.O. Box 7240
Bonn, D-53072
Germany

Elena Stancanelli

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

HOME PAGE: http://www.parisschoolofeconomics.eu/fr/stancanelli-elena/

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