publication . Preprint . Article . 2013

Taxation and Labor Force Participation: The Case of Italy

Stefania Marcassa; Fabrizio Colonna;
Open Access English
  • Published: 02 Oct 2013
  • Publisher: HAL CCSD
  • Country: France
Abstract
Women�s labor force participation is lowest in Italy among the OECD countries. Moreover, the participation rate of married women is positively correlated with their husbands' income. We show that high tax rates together with tax credits and transfers raise the burden for two-earner households, generating disincentives to work. We estimate a structural labor supply model for women and use the estimated parameters to simulate the effects of alternative revenue-neutral tax systems. We find that joint taxation implies a drop in the participation rate. Conversely, provisions for a working tax credit and gender-based taxation boost it; the effects of the former are ...
Subjects
free text keywords: female labor force participation, Italian tax system, second earner tax rate, joint taxation, gender-based taxation, working tax credit, JEL: J - Labor and Demographic Economics/J.J2 - Demand and Supply of Labor/J.J2.J21 - Labor Force and Employment, Size, and Structure, JEL: J - Labor and Demographic Economics/J.J2 - Demand and Supply of Labor/J.J2.J22 - Time Allocation and Labor Supply, JEL: H - Public Economics/H.H3 - Fiscal Policies and Behavior of Economic Agents/H.H3.H31 - Household, [SHS.ECO]Humanities and Social Sciences/Economics and Finance, female labor force participation, Italian tax system, marginal tax rate, joint taxation, gender-based taxation, working tax credit, J21, J22, H31 [female labor force participation, Italian tax system, second earner tax rate, joint taxation, gender-based taxation, working tax credit JEL Classification], female labor force participation, taxation., female labor force participation,Italian tax system,second earner tax rate,joint taxation,gender-based taxation,working tax credit, female labor force participation; Italian tax system; second earner tax rate; joint taxation; gender-based taxation; working tax credit, Value-added tax, State income tax, Double taxation, Indirect tax, Economics, International taxation, Direct tax, Labour economics, Tax credit, jel:J21, jel:J22, jel:H31

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