Taxes and Market Hours: The Role of Gender and Skill
60 Pages Posted: 25 Sep 2017
Cross-country differences of market hours in 17 OECD countries are mainly due to the hours of women, especially low-skilled women. This paper develops a model to account for the gender-skill differences in market hours across countries. The model explains a substantial fraction of the differences in hours by taxes, which reduce market hours in favor of leisure and home production, and by subsidized care, which frees (mostly) women from home care in favor of their market hours. Low-skilled women are more responsive to policy because of their low market returns and their comparative advantage in home activities.
Keywords: cross-country differences in market hours, home production, subsidies on family care
JEL Classification: E24, E62, J22
Suggested Citation: Suggested Citation