Taxation and the Earnings of Husbands and Wives: Evidence from Sweden

Alexander Gelber ()

The Review of Economics and Statistics, 2014, vol. 96, issue 2, 287-305

Abstract: I examine the response of husbands' and wives' earnings to a tax reform in which husbands' and wives' tax rates changed independently, allowing me to examine the effect of both spouses' incentives on each spouse's behavior. I analyze the large Swedish tax reform of 1990–1991 and find that in response to a compensated fall in one spouse's tax rate, each spouse's earnings rise. I compare these results to those of simplified econometric models used in the typical setting in which independent variation in each spouse's tax rate is unavailable. I find that standard econometric specifications may produce substantially biased estimates. © 2014 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: tax reform; taxation; spouses; Sweden (search for similar items in EconPapers)
JEL-codes: H24 H31 J12 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (49)

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Working Paper: Taxation and the Earnings of Husbands and Wives: Evidence from Sweden (2011)
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