Scandinavian Working Papers in Economics

Working Paper Series, Center for Fiscal Studies,
Uppsala University, Department of Economics

No 2012:6: Gender-Based and Couple-Based Taxation

Spencer Bastani ()
Additional contact information
Spencer Bastani: Uppsala Center for Fiscal Studies, Postal: Department of Economics, Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: In a recent paper Alesina et al. (2011) construct a model in which different labor supply elasticities for men and women emerge endogenously from intra-household bargaining. In this paper I explore the optimal tax implications of their model in an economy with both singles and couples and inequality across as well as within households. In the model, the welfare of married women can be improved by lowering taxes for single women. Moreover, if single men earn more than single women, the welfare of married women can alternatively be improved by a gender-neutral tax scheme which taxes singles at a higher rate. Because the government is concerned not only with equalizing utilities within families, but also with the redistribution between high income and low income households, gender-based adjustments in the income tax must be weighed against the welfare consequences of changing the progressivity of the tax system. I find that larger lump-sum transfers to women is always optimal. Interestingly, marginal tax rates, on the other hand, should be lower for women only if the exogenous bargaining power of men is moderate. The welfare gains of gender based taxation are sizable and the welfare gains of having tax instruments which depend on household composition are even larger.

Keywords: optimal taxation; tagging; family economics; intra-household bargaining

JEL-codes: D13; H21; J16; J20

55 pages, March 28, 2012

Full text files

129526_wp20126.pdf PDF-file 

Download statistics

Questions (including download problems) about the papers in this series should be directed to Katarina Grönvall ()
Report other problems with accessing this service to Sune Karlsson ().

This page generated on 2024-02-05 17:13:54.