Arbeitspapier

Optimal taxation, child care and models of the household

This paper presents for the first time the properties of optimal piecewise linear tax systems for two-earner households, based on joint and individual incomes respectively. A key contribution is the analysis of the interaction of second earner wage differences, variation in prices of bought-in inputs into household production in the form of child care, and domestic productivity differences as determinants of across-household heterogeneity in second earner labour supply. The analysis highlights the importance of the elasticity of substitution between parental and non-parental child care in determining the relationship between utility and income across households. A central result is that taking account of a richer and more realistic specification of household time use widens the set of cases in which individual taxation is welfare-superior to joint taxation.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 6823

Klassifikation
Wirtschaft
Time Allocation and Labor Supply
Taxation and Subsidies: Efficiency; Optimal Taxation
Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
Fiscal Policies and Behavior of Economic Agents: Household
Household Production and Intrahousehold Allocation
Thema
optimal taxation
time allocation
household production
child care
inequality
labour supply

Ereignis
Geistige Schöpfung
(wer)
Apps, Patricia
Rees, Ray
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2012

Handle
Letzte Aktualisierung
10.03.2025, 11:42 MEZ

Datenpartner

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Objekttyp

  • Arbeitspapier

Beteiligte

  • Apps, Patricia
  • Rees, Ray
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2012

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