Female market work, tax regimes, and the rise of the service sector

Michelle Rendall

No 492, IEW - Working Papers from Institute for Empirical Research in Economics - University of Zurich

Abstract: US regional variation shows a positive correlation between the size of the service economy and female market hours, which is partially driven by different tax regimes. Based on this fact, this paper develops a multi-sector model to: (1) quantify the effect of different tax regimes in incentivizing woman to enter the labor force, and (2) estimate the feedback effect from women entering the labor force on the service sector size. Counterfactual results suggest that tax progressivity has a stronger effect than tax levels on married female market hours and the speed of structural transformation. In addition, married households react more to progressivity increases and single households are more sensitive to level changes. These results highlight that models ignoring tax structures (levels and progressivity) and household heterogeneity (dual versus single earning households) could lead to erroneous policy conclusions.

Keywords: Technological progress; sectoral labor allocation; female labor supply; labor demand; taxation (search for similar items in EconPapers)
JEL-codes: E21 E24 J20 O14 (search for similar items in EconPapers)
Date: 2015-12, Revised 2017-07
New Economics Papers: this item is included in nep-dge, nep-eec, nep-eur, nep-lab and nep-mac
References: View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Related works:
Journal Article: Female Market Work, Tax Regimes, and the Rise of the Service Sector (2018)
Working Paper: The Service Sector and Female Market Work: Europe vs the US (2013)
Working Paper: The Service Sector and Female Market Work: Europe vs US (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:iewwpx:492

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