Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Macroeconomics

Editor-in-Chief: Cavalcanti, Tiago / Kambourov, Gueorgui

Ed. by Abraham, Arpad / Carceles-Poveda , Eva / Debortoli, Davide / Schwartzman, Felipe / Wang, Pengfei


IMPACT FACTOR 2018: 0.674

CiteScore 2018: 0.70

SCImago Journal Rank (SJR) 2018: 0.605
Source Normalized Impact per Paper (SNIP) 2018: 0.694

Online
ISSN
1935-1690
See all formats and pricing
More options …

To Work or Not to Work: Did Tax Reforms Affect Labor Force Participation of Married Couples?

Michael Bar / Oksana Leukhina
Published Online: 2009-07-08 | DOI: https://doi.org/10.2202/1935-1690.1807

During the period 1960-2000, the proportion of two-earner couples among married couples in the U.S. more than doubled, while tax laws underwent numerous changes, with major reforms taking place in the 1980's (flattening of the federal income tax schedule) and in the 1990's (major expansion of the Earned Income Tax Credit (EITC)). We investigate the impact of the actual tax reforms on married couples' participation through a model of heterogeneous households. Theoretically, we elucidate what aspects of the tax reforms are important for a family time allocation choice when the work choice is discrete. Quantitatively, we show that even in the 1980's, changes in tax laws account for only 8% of the increase in the proportion of two-earner couples, although this small average impact masks a much larger impact experienced by women with high earning husbands. Another important finding is that the Earned Income Tax Credit substantially discourages work participation among married couples with low-earning husbands. A notable contribution of this work is the accurate incorporation of the complex U.S. tax code into a model of heterogeneous households, which is done using TAXSIM, a tax calculator software.

Keywords: labor force participation; married couples; tax reforms; family taxation

About the article

Published Online: 2009-07-08


Citation Information: The B.E. Journal of Macroeconomics, Volume 9, Issue 1, ISSN (Online) 1935-1690, DOI: https://doi.org/10.2202/1935-1690.1807.

Export Citation

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston.Get Permission

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[1]
Fabrizio Colonna and Stefania Marcassa
SSRN Electronic Journal, 2013
[2]
Pere Gomis-Porqueras and Adrian Peralta-Alva
SSRN Electronic Journal, 2008
[3]
Seonglim Lee, Jinkook Lee, and Yunhee Chang
SSRN Electronic Journal, 2011
[4]
Alexander Bick and Nicola Fuchs-Schündeln
The Review of Economic Studies, 2018, Volume 85, Number 3, Page 1543
[5]
Anna Kurowska
International Journal of Sociology and Social Policy, 2017, Volume 37, Number 1/2, Page 33
[7]
Simona E. Cociuba and Alexander Ueberfeldt
Journal of Economic Dynamics and Control, 2015, Volume 52, Page 75
[8]
Michael Bar and Oksana Leukhina
Journal of Macroeconomics, 2011, Volume 33, Number 4, Page 491

Comments (0)

Please log in or register to comment.
Log in