Household Taxation, Income Splitting and Labor Supply Incentives: A Microsimulation Study for Germany
Viktor Steiner and
Katharina Wrohlich ()
No 421, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research
We analyze potential labor supply effects of a shift from the current German system of taxation of married couples to a system of limited real income splitting on the basis of econometric household labor supply model embedded in a tax-benefit model. Our simulation results show relatively small labor supply effects of a shift from the current system to one limited real income splitting system. In the benchmark scenario of a shift to separate taxation labor supply of wives would increase substantially in west Germany, while a significant number of husbands would drop out of the labor force.
JEL-codes: H31 H24 J22 (search for similar items in EconPapers)
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Journal Article: Household Taxation, Income Splitting and Labor Supply Incentives – A Microsimulation Study for Germany (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:diw:diwwpp:dp421
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