title   
  

Taxation, aggregates and the household

Guner, Nezih and Kaygusuz, Remzi and Ventura, Gustavo (2008) Taxation, aggregates and the household. [Working Paper / Technical Report] Sabanci University ID:SU_FASS_2008/0005

[img]
Preview
PDF - Requires a PDF viewer such as GSview, Xpdf or Adobe Acrobat Reader
345Kb

Abstract

We evaluate reforms to the U.S. tax system in a dynamic setup with heterogeneous married and single households, and with an operative extensive margin in labor supply. We restrict our model with observations on gender and skill premia, labor force participation of married females across skill groups, and the structure of marital sorting. We study four revenue-neutral tax reforms: a proportional consumption tax, a proportional income tax, a progressive consumption tax, and a reform in which married individuals file taxes separately. Our findings indicate that tax reforms are accompanied by large and differential effects on labor supply: while hours per-worker display small increases, total hours and female labor force participation increase substantially. Married females account for more than 50% of the changes in hours associated to reforms, and their importance increases sharply for values of the intertemporal labor supply elasticity on the low side of empirical estimates. Tax reforms in a standard version of the model result in output gains that are up to 15% lower than in our benchmark economy.

Item Type:Working Paper / Technical Report
Uncontrolled Keywords:Taxation, Two-earner Households, Labor Force Participation
Subjects:H Social Sciences > HQ The family. Marriage. Woman
H Social Sciences > H Social Sciences (General)
H Social Sciences > HJ Public Finance
ID Code:8805
Deposited By:Remzi Kaygusuz
Deposited On:03 Sep 2008 12:53
Last Modified:03 Sep 2008 12:53

Repository Staff Only: item control page