Taxation and female labor supply in Italy

Fabrizio Colonna () and Stefania Marcassa

IZA Journal of Labor Policy, 2015, vol. 4, issue 1, 1-29

Abstract: Italy has the lowest labor supply of married women among EU countries. Moreover, the participation rate of married women is positively correlated with their husbands’ income. We show that these two features can be partly explained by the tax system: a high tax rate together with tax credits and transfers raise the burden of two-earner households, generating disincentives to work. We estimate two structural models of labor supply: one where the husband’s labor supply is inelastic and one with joint couple decisions. Then we use the estimated parameters to simulate the effects of alternative revenue-neutral tax systems on labor supply. We find that working tax credit and gender-based taxation boost it, with the effects of the former being concentrated on low educated women. Conversely, joint taxation implies a drop in the participation rate. JEL codes: J21, J22, H31 Copyright Colonna et al.; licensee Springer. 2015

Keywords: Female labor force participation; Italian tax system; Second earner tax rate; Joint taxation; Gender-based taxation; Working tax credit (search for similar items in EconPapers)
JEL-codes: H31 J21 J22 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (15)

Downloads: (external link)
http://hdl.handle.net/10.1186/s40173-015-0030-0 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Taxation and female labor supply in Italy (2015)
Working Paper: Taxation and female labor supply in Italy (2015)
Working Paper: Taxation and female labor supply in Italy (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:izalpo:v:4:y:2015:i:1:p:1-29:10.1186/s40173-015-0030-0

Ordering information: This journal article can be ordered from
http://www.springer.com/economics/journal/40173

DOI: 10.1186/s40173-015-0030-0

Access Statistics for this article

IZA Journal of Labor Policy is currently edited by Juan F. Jimeno, David Neumark and Núria Rodríguez-Planas

More articles in IZA Journal of Labor Policy from Springer, Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA)
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().