What's Best for Women: Gender Based Taxation, Wage Subsidies or Basic Income?

29 Pages Posted: 6 Oct 2012

See all articles by Ugo Colombino

Ugo Colombino

University of Turin - Department of Economics

Edlira Narazani

University of Turin - Department of Economics S. Cognetti de Martiis; University of Turin - Department of Economics S. Cognetti de Martiis

Abstract

We use a microeconometric model of household labour supply in order to evaluate, with Italian data, the behavioural and welfare effects of gender based taxation (GBT) as compared to other policies based on different optimal taxation principles. The comparison is interesting because GBT, although technically correct, might face implementation difficulties not shared by other policies that in turn might produce comparable benefits. The simulation procedure accounts for the constraints implied by fiscal neutrality and market equilibrium. Our results support to some extent the expectations of GBT's proponents. However it is not an unquestionable success. GBT induces a modest increase of women's employment, but similar effects can be attained by universal subsidies on low wages. When the policies are evaluated in terms of welfare, GBT ranks first among single women but for the whole population the best policies are subsidies on low wages, unconditional transfers or a combination of the two.

Keywords: gender based taxation, wage subsidies, basic income, guaranteed minimum income, labour supply, social welfare

JEL Classification: H2, I3, J2

Suggested Citation

Colombino, Ugo and Narazani, Edlira and Narazani, Edlira, What's Best for Women: Gender Based Taxation, Wage Subsidies or Basic Income?. IZA Discussion Paper No. 6828, Available at SSRN: https://ssrn.com/abstract=2157970 or http://dx.doi.org/10.2139/ssrn.2157970

Ugo Colombino (Contact Author)

University of Turin - Department of Economics ( email )

Via Po, 53
Torino, 10124
Italy

Edlira Narazani

University of Turin - Department of Economics S. Cognetti de Martiis ( email )

Via Po' 53
Torino, 10124
Italy

University of Turin - Department of Economics S. Cognetti de Martiis ( email )

Via Po' 53
Torino, 10124
Italy

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