Gender Based Taxation and the Division of Family Chores
Alberto F. Alesina
Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)
European University Institute - Economics Department (ECO); University of Bologna, Dipartimento di Scienze Economiche; Institute for the Study of Labor (IZA); Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute for Economic Research)
University of Chicago - Booth School of Business; National Bureau of Economic Research (NBER)
September 20, 2010
Harvard Institute of Economic Research Discussion Paper No. 2145
Gender-Based Taxation (GBT) satisfies Ramsey’s rule of optimality because it taxes at a lower rate the more elastic labor supply of women. This holds when different elasticities between men and women are taken as exogenous. We study GBT in a model in which labor supply elasticities emerge endogenously from the bargained allocation of goods and time in the family. We explore the cases of superior bargaining power for men, higher men wages and higher women productivity in home duties. In all cases, men commit to a career in the market and take less home duties than women. As a result, their market work becomes less substitutable to home duty and their labor supply responds less to changes in the market wage. When society can resolve its distributional concerns efficiently with gender-specific lump sum transfers, GBT with higher marginal tax rates on (single and married) men is optimal. In addition, GBT affects the intrafamily bargaining, leading to a more balanced allocation of labor market outcomes across spouses and a smaller gender gap in labor supply elasticities.
Number of Pages in PDF File: 44
Keywords: Optimal Taxation, Economics of Gender, Family Economics, Elasticity of Labor Supply
JEL Classification: D13, H21, J16, J20working papers series
Date posted: November 28, 2007 ; Last revised: September 27, 2010
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