On the Performance of Unitary Models of Household Labor Supply Estimated on 'Collective' Data with Taxation

Performance des modèles unitaires d’offre de travail des ménages estimés sur la base de données «collectives » en présence de taxation

Denis Beninger () and Francois Laisney
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Denis Beninger: Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - University of Mannheim = Universität Mannheim

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Abstract: This paper compares collective and unitary models on the basis of simulated collective data with income taxation. We distinguish the cases of individual and joint taxation. Estimating a flexible unitary model, we obtain strikingly different " preference" parameters depending on the type of taxation. We also obtain substantial differences between predicted adjustments to labor supply following a switch between tax regimes. Our results show that even the design of revenue-neutral reforms may be heavily distorted by the use of a unitary model on collective data. Finally, we discuss distortions affecting the welfare analysis of reforms on the basis of unitary estimates when the model generating the data is a collective model. The results suggest that increased efforts should be devoted to the estimation of collective models with taxation.

Keywords: Pareto optimal allocations; Policy evaluation; Simulated data; Allocations Pareto optimales; Évaluation de réformes fiscales; Données simulées (search for similar items in EconPapers)
Date: 2006
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Published in Cahiers d'Economie et de Sociologie Rurales, 2006, 4 (81), pp.5-36. ⟨10.3406/reae.2006.2022⟩

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Related works:
Journal Article: On the performance of unitary models of household labor supply estimated on “collective” data with taxation (2006)
Journal Article: On the performance of unitary models of household labor supply estimated on “collective” data with taxation (2006)
Working Paper: On the performance of unitary models of household labor supply estimated on “collective” data with taxation (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00279374

DOI: 10.3406/reae.2006.2022

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