Optimal Taxation, Child Care and Models of the Household

Patricia Apps () and Ray Rees

No 4578, CESifo Working Paper Series from CESifo

Abstract: This paper presents the properties of optimal piecewise linear tax systems for two-earner households, based on joint and individual incomes respectively. A key contribution is the analysis of the interaction between second earner wage differences, variation in the price of child care and domestic productivity differences as determinants of across-household heterogeneity in second earner labour supply, and of the resulting relationship between household income and the wellbeing of household members. A central result is that taking account of a richer and more realistic specification of household time use widens the set of cases in which individual taxation is welfare-superior.

Keywords: optimal taxation; labour supply; time use; child care; household production; inequality (search for similar items in EconPapers)
JEL-codes: H21 H24 H31 J22 (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-pbe and nep-pub
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Related works:
Working Paper: Optimal Taxation, Child Care and Models of the Household (2012)
Working Paper: Optimal Taxation, Child Care and Models of the Household (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_4578

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