Assessing the Welfare Impact of the 2001 Tax Reform on Dual-Earner Families

35 Pages Posted: 6 Dec 2007

See all articles by Julie L. Hotchkiss

Julie L. Hotchkiss

Federal Reserve Bank of Atlanta; Georgia State University - Department of Economics

Robert Elijah Moore

Georgia State University - Andrew Young School of Policy Studies

Date Written: December 2007

Abstract

The welfare impact of the 2001 income tax reform is assessed across dual-earner families with different characteristics. A household labor supply model is estimated to account for variable behavioral responses by family type. It was found that while higher education families received a larger share of the welfare gain generated from lower marginal tax rates, it was the lower education families that provided the bulk of the additional labor supply motivated by the tax reform. Differing welfare gains across families with different numbers of children were also found, highlighting the importance of allowing responses to vary across family characteristics when assessing the welfare impact of a policy change.

Keywords: family labor supply, tax reform, family welfare, family utility

JEL Classification: J22, H31, H23, I31

Suggested Citation

Hotchkiss, Julie L. and Moore, Robert Elijah, Assessing the Welfare Impact of the 2001 Tax Reform on Dual-Earner Families (December 2007). Andrew Young School of Policy Studies Research Paper Series No. 07-38; FRB of Atlanta Working Paper No. 2007-27. Available at SSRN: https://ssrn.com/abstract=1064061 or http://dx.doi.org/10.2139/ssrn.1064061

Julie L. Hotchkiss (Contact Author)

Federal Reserve Bank of Atlanta ( email )

Research Department
1000 Peachtree Street N.E.
Atlanta, GA 30309-4470
United States
404-498-8198 (Phone)
404-498-8058 (Fax)

Georgia State University - Department of Economics ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States

Robert Elijah Moore

Georgia State University - Andrew Young School of Policy Studies ( email )

P.O. Box 3992
Atlanta, GA 30302-3992
United States
404-651-3756 (Phone)
404-651-4985 (Fax)

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
48
Abstract Views
559
PlumX Metrics