Reference

Helmuth Cremer, and Kerstin Roeder, Income taxation of couples, spouses' labor supplies and the gender wage gap, TSE Working Paper, n. 18-951, September 2018.

Abstract

We study the taxation of couples when female wages do not re?ect their true productivity. We show that the expression for the marginal tax rates of the male spouses is the same as in a Mirrleesian world where wages re?ect true productivities. Marginal taxes for the female spouses are reduced because of a Pigouvian correction. Consequently, the wage discrimination pleads for a lower marginal tax on the female spouse. Furthermore, the distortion of a couples?tradeo¤ between male and female labor supply is the same as in a Mirrleesian world without a gender wage gap. It only depends on true productivities and not on wages. In other words, the tax system completely neutralizes the extra distortion introduced by the wedge between the female spouse?s wage and her true productivity.

Keywords

Couples'income taxation; gender wage gap; optimal income taxation; household labor supply;

JEL codes

  • D10: General
  • H21: Efficiency • Optimal Taxation
  • H31: Household
  • J16: Economics of Gender • Non-labor Discrimination
  • J22: Time Allocation and Labor Supply

Replaced by

Helmuth Cremer, and Kerstin Roeder, Income taxation of couples, spouses' labor supplies and the gender wage gap, Economics Letters, Elsevier, 2019.