The impacts of the 1988 tax reform on married women's labour supply in Canada

Sung-Hee Jeon

Department of Economics Working Papers from McMaster University

Abstract: I investigate the impact of the Canadian Federal tax reform of 1988 on the labour supply of lower income married women. The Canadian federal tax reform of 1988 replaced the spousal exemption with a nonrefundable tax credit. This reduced the dependence of a low income married woman’s effective marginal tax rate on the effective marginal tax rate of her husband. Using difference-in-difference estimators, I compare the labour supply of women married to higher income husbands (the "treatment" group) and the labour supply of women married to lower income husbands (the "control" group). The treatment group experienced significantly larger reductions in their effective marginal tax rate than the control group. I find a significant increase in labour force participation for women married to higher income husbands. I also show that the tax reform significantly increased the total annual working ho

JEL-codes: H24 J22 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2004
New Economics Papers: this item is included in nep-pbe and nep-reg
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:mcm:deptwp:2004-19

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