Collective Labor Supply, Taxes, and Intrahousehold Allocation: An Empirical Approach

Hans Bloemen ()

Journal of Business & Economic Statistics, 2019, vol. 37, issue 3, 471-483

Abstract: Most empirical studies of the impact of labor income taxation on the labor supply behavior of households use a unitary modeling approach. In this article, we empirically analyze income taxation and the choice of working hours by combining the collective approach for household behavior and the discrete hours choice framework with fixed costs of work. We identify the sharing rule parameters with data on working hours of both the husband and the wife within a couple. Parameter estimates are used to evaluate various model outcomes, like the wage elasticities of labor supply and the impacts of wage changes on the intrahousehold allocation of income. We also simulate the consequences of a policy change in the tax system. We find that the collective model has different empirical outcomes of income sharing than a restricted model that imposes income pooling. In particular, a specification with income pooling fails to capture asymmetries in the income sharing across spouses. These differences in outcomes have consequences for the evaluation of policy changes in the tax system and shed light on the effectiveness of certain policies.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (8)

Downloads: (external link)
http://hdl.handle.net/10.1080/07350015.2017.1379407 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Collective Labour Supply, Taxes, and Intrahousehold Allocation: An Empirical Approach (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:taf:jnlbes:v:37:y:2019:i:3:p:471-483

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/UBES20

DOI: 10.1080/07350015.2017.1379407

Access Statistics for this article

Journal of Business & Economic Statistics is currently edited by Eric Sampson, Rong Chen and Shakeeb Khan

More articles in Journal of Business & Economic Statistics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().