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Gender Bias in Tax Systems Based on Household Income

Author

Listed:
  • Andrienko, Yuri

    (University of Sydney)

  • Apps, Patricia

    (University of Sydney)

  • Rees, Ray

    (University of Munich)

Abstract
The assumption that household income is strongly and positively correlated with a household's real standard of living provides the basis for the joint taxation of families, which has the effect of discriminating against married women as second earners. This paper shows, in the context of a model of the household with young children present, that this assumption is not tenable. The fact that there is considerable heterogeneity in female labour supply which cannot be explained by wage rates and the number and ages of children requires us to look for other explanations, and we argue that these can be found in the variation of child care costs and productivities across households. When these are taken into account, we show, by theoretical modelling and numerical simulations based on survey data, that household income is a poor indicator of household well-being.

Suggested Citation

  • Andrienko, Yuri & Apps, Patricia & Rees, Ray, 2014. "Gender Bias in Tax Systems Based on Household Income," IZA Discussion Papers 8676, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8676
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    References listed on IDEAS

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    1. Laurens Cherchye & Bram De Rock & Frederic Vermeulen, 2012. "Married with Children: A Collective Labor Supply Model with Detailed Time Use and Intrahousehold Expenditure Information," American Economic Review, American Economic Association, vol. 102(7), pages 3377-3405, December.
    2. Martin Feldstein & Daniel R. Feenberg, 1996. "The Taxation of Two-Earner Families," NBER Chapters, in: Empirical Foundations of Household Taxation, pages 39-75, National Bureau of Economic Research, Inc.
    3. Petter Lundborg; & Anton Nilsson; & Dan-Olof Rooth, 2012. "Parental education and offspring outcomes: evidence from the Swedish compulsory schooling reform," Health, Econometrics and Data Group (HEDG) Working Papers 12/12, HEDG, c/o Department of Economics, University of York.
    4. Apps,Patricia & Rees,Ray, 2009. "Public Economics and the Household," Cambridge Books, Cambridge University Press, number 9780521716284, January.
    5. Richard Blundell & Pierre-André Chiappori & Costas Meghir, 2005. "Collective Labor Supply with Children," Journal of Political Economy, University of Chicago Press, vol. 113(6), pages 1277-1306, December.
    6. Martin Feldstein & James M. Poterba, 1996. "Empirical Foundations of Household Taxation," NBER Books, National Bureau of Economic Research, Inc, number feld96-1, February.
    7. Apps, Patricia, 1982. "Institutional inequality and tax incidence," Journal of Public Economics, Elsevier, vol. 18(2), pages 217-242, July.
    8. Boskin, Michael J. & Sheshinski, Eytan, 1983. "Optimal tax treatment of the family: Married couples," Journal of Public Economics, Elsevier, vol. 20(3), pages 281-297, April.
    9. Patricia Apps & Ray Rees, 2010. "Family labor supply, taxation and saving in an imperfect capital market," Review of Economics of the Household, Springer, vol. 8(3), pages 297-323, September.
    10. Apps, Patricia F. & Rees, Ray, 1988. "Taxation and the household," Journal of Public Economics, Elsevier, vol. 35(3), pages 355-369, April.
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    Cited by:

    1. Marisa Bucheli & Cecilia Olivieri, 2017. "Gendered Effects of the Personal Income Tax: Evidence from a Schedular System with Individual Filing in a Developing Country," Documentos de Trabajo (working papers) 0217, Department of Economics - dECON.

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    More about this item

    Keywords

    gender; discrimination; household taxation; child care; female labour supply; household production; inequality;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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