Optimal Taxation, Child Care and Models of the HouseholdPatricia Apps () and Ray Rees No 673, CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University Abstract: This paper presents for the .rst time the properties of optimal piece-wise 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 di¤erences, 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. Keywords: Optimal taxation; time allocation; household production; child care; labour supply; inequality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:auu:dpaper:673 Access Statistics for this paper More papers in CEPR Discussion Papers from Centre for Economic Policy Research, Research School of Economics, Australian National University Contact information at EDIRC. |
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