Taxation and Parental Time Allocation Under Different Assumptions on Altruism

16 Pages Posted: 4 Apr 2014

See all articles by Alessandra Casarico

Alessandra Casarico

Bocconi University - Department of Policy Analysis and Public Management

Alessandro Sommacal

Universite Catholique de Louvain - Institut de Recherches Economiques et Sociales (IRES)

Date Written: March 10, 2014

Abstract

In this paper we develop an overlapping generations model in which child care matters for human capital accumulation. We investigate whether an increase in labor supply brought about by a reduction in taxes is always associated with a reduction in parental time devoted to children, which modifies their human capital accumulation process. We show that the result critically depends on the assumptions on the altruistic motives behind the choice of devoting time to children.

Keywords: early childhood environment, child care, labor supply, warm glow, full altruism

JEL Classification: J130, J220, J240

Suggested Citation

Casarico, Alessandra and Sommacal, Alessandro, Taxation and Parental Time Allocation Under Different Assumptions on Altruism (March 10, 2014). CESifo Working Paper Series No. 4690. Available at SSRN: https://ssrn.com/abstract=2419901

Alessandra Casarico (Contact Author)

Bocconi University - Department of Policy Analysis and Public Management ( email )

Via Roentgen 1
Milan, 20136
Italy

Alessandro Sommacal

Universite Catholique de Louvain - Institut de Recherches Economiques et Sociales (IRES) ( email )

3, Place Montesquieu
1348 Louvain-la-Neuve
Belgium

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