Are Marriage-Related Taxes and Social Security Benefits Holding Back Female Labor Supply?

Margherita Borella, Mariacristina De Nardi and Fang Yang

No 26097, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In the United States, both taxes and old age Social Security benefits depend on one’s marital status and tend to discourage the labor supply of the secondary earner. To what extent are these provisions holding back female labor supply? We estimate a rich dynamic life-cycle model of labor supply and savings for couples and singles using the Method of Simulated Moments for the 1945 and 1955 birth cohorts. Our model matches well the life cycle profiles of labor market participation, hours, and savings for married and single people, and generates plausible elasticities of labor supply. It implies that eliminating these marriage-related provisions would drastically increase the participation of married women over their entire life cycle, reduce the participation of married men after age 60, and increase savings. If the resulting government surplus were used to lower income taxation, there would be large welfare gains for the vast majority of the population. These results hold for both cohorts, including the later one, which has similar participation to that of more recent generations.

JEL-codes: E21 H2 J22 J31 (search for similar items in EconPapers)
Date: 2019-07
New Economics Papers: this item is included in nep-age, nep-dem, nep-dge, nep-lma and nep-mac
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Citations: View citations in EconPapers (27)

Published as Margherita Borella & Mariacristina De Nardi & Fang Yang, 2023. "Are Marriage-Related Taxes and Social Security Benefits Holding Back Female Labour Supply? [“Skills, Tasks and Technologies: Implications for Employment and Earnings]," Review of Economic Studies, Oxford University Press, vol. 90(1), pages 102-131.

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Related works:
Journal Article: Are Marriage-Related Taxes and Social Security Benefits Holding Back Female Labour Supply? (2023)
Working Paper: Are Marriage-Related Taxes and Social Security Benefits Holding Back Female Labor Supply? (2020)
Working Paper: Are marriage-related taxes and Social Security benefits holding back female labor supply? (2019)
Working Paper: Are marriage-related taxes and Social Security benefits holding back female labor supply? (2019)
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