Taxes and Market Hours: The Role of Gender and Skill

60 Pages Posted: 25 Sep 2017

See all articles by Robert Duval-Hernandez

Robert Duval-Hernandez

World Bank

Lei Fang

Federal Reserve Bank of Atlanta

Rachel Ngai

London School of Economics & Political Science (LSE) - Department of Economics; Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management

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Abstract

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

Duval-Hernandez, Robert and Fang, Lei and Ngai, Liwa Rachel, Taxes and Market Hours: The Role of Gender and Skill. IZA Discussion Paper No. 11002. Available at SSRN: https://ssrn.com/abstract=3041798

Robert Duval-Hernandez (Contact Author)

World Bank ( email )

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Lei Fang

Federal Reserve Bank of Atlanta ( email )

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Liwa Rachel Ngai

London School of Economics & Political Science (LSE) - Department of Economics ( email )

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Hong Kong University of Science & Technology (HKUST) - HKUST School of Business and Management ( email )

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