Income taxation, labour supply and housework: a discrete choice model for French couples

Jan Kabatek (1) , Arthur van Soest (1) , Elena Stancanelli (2, 3)

1 Tilburg University [Tilburg]
2 CES - Centre d'économie de la Sorbonne
3 PSE - Paris School of Economics

Earlier studies suggest that income taxation may affect not only labour supply but also domestic work. Here we investigate the impact of income taxation on partners' labour supply and housework, using data for France that taxes incomes of married couples jointly. We estimate a household utility model in which the marginal utilities of leisure and housework of both partners are modelled as random coefficients, depending on observed and unobserved characteristics. We conclude that both partners' market and housework hours are responsive to changes in the tax system. A policy simulation suggests that replacing joint taxation of married spouses' incomes with separate taxation would increase the husband's housework hours by 1.3% and reduce his labour supply by 0.8%. The wife's market hours would increase by 3.7%, and her housework hours would fall by 2.0%.

Mots clés: Time use; Taxation; Discrete choice models

Domaines: Economies et finances

Jan Kabatek, Arthur van Soest, Elena Stancanelli. Income taxation, labour supply and housework: a discrete choice model for French couples. Labour Economics, 2014, 27, pp.30-43. ⟨10.1016/j.labeco.2014.01.004⟩. ⟨hal-00966801⟩