Income taxation of couples, spouses' labor supplies and the gender wage gap

Cremer, Helmuth and Roeder, Kerstin (2018) Income taxation of couples, spouses' labor supplies and the gender wage gap. TSE Working Paper, n. 18-951, Toulouse

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We study the taxation of couples when female wages do not re?ect their true productivity. We show that the expression for the marginal tax rates of the male spouses is the same as in a Mirrleesian world where wages re?ect true productivities. Marginal taxes for the female spouses are reduced because of a Pigouvian correction. Consequently, the wage discrimination pleads for a lower marginal tax on the female spouse. Furthermore, the distortion of a couples?tradeo¤ between male and female labor supply is the same as in a Mirrleesian world without a gender wage gap. It only depends on true productivities and not on wages. In other words, the tax system completely neutralizes the extra distortion introduced by the wedge between the female spouse?s wage and her true productivity.

Item Type: Monograph (Working Paper)
Language: English
Date: September 2018
Place of Publication: Toulouse
Uncontrolled Keywords: Couples'income taxation, gender wage gap, optimal income taxation, household labor supply
JEL codes: D10 - General
H21 - Efficiency; Optimal Taxation
H31 - Household
J16 - Economics of Gender; Non-labor Discrimination
J22 - Time Allocation and Labor Supply
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 11 Sep 2018 14:26
Last Modified: 28 Jun 2019 14:42

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