Public Provision, Commodity Demand, and Hours of Work: An Empirical Analysis

24 Pages Posted: 23 Sep 2014

See all articles by Jukka Pirttila

Jukka Pirttila

United Nations - World Institute for Development Economics Research (UNU/WIDER); Tampere University of Technology

Ilpo Suoniemi

Labour Institute for Economic Research

Multiple version iconThere are 2 versions of this paper

Date Written: October 2014

Abstract

The theoretical analysis of optimal commodity taxation is advanced, but there is only limited empirical evidence to guide commodity tax policies. With this paper, we contribute to this body of literature by empirically examining, using Finnish consumption data, the relation between working hours, consumption demand, and the use of publicly provided day care. When labour income is controlled for in a nonā€parametric way, we find that capital income and housing expenses are negatively associated with working hours, whereas the use of childcare is positively correlated with working hours. These results provide arguments for taxing capital income and housing, and for subsidizing day care.

Keywords: Childcare services, commodity taxation, semiparametric methods

JEL Classification: C14, H21, H42

Suggested Citation

Pirttila, Jukka and Suoniemi, Ilpo, Public Provision, Commodity Demand, and Hours of Work: An Empirical Analysis (October 2014). The Scandinavian Journal of Economics, Vol. 116, Issue 4, pp. 1044-1067, 2014. Available at SSRN: https://ssrn.com/abstract=2499944 or http://dx.doi.org/10.1111/sjoe.12079

Jukka Pirttila (Contact Author)

United Nations - World Institute for Development Economics Research (UNU/WIDER) ( email )

Katajanokanlaituri 6B
Helsinki, FIN-00160
Finland

Tampere University of Technology ( email )

P.O. 541, Korkeakoulunkatu 8 (Festia building)
Tampere, FI-33101
Finland

Ilpo Suoniemi

Labour Institute for Economic Research ( email )

Register to save articles to
your library

Register

Paper statistics

Downloads
0
Abstract Views
135
PlumX Metrics