Taxation and Labor Force Participation: The Case of Italy

Fabrizio Colonna and Stefania Marcassa
Additional contact information
Fabrizio Colonna: BI - Banca d´Italia

Abstract: Italy has the lowest labor force participation of women among European countries. Moreover, the participation rate of married women is positively correlated to their husbands' income. We show that a high tax schedule together with tax credits and transfers raise the burden of two-earner households, generating disincentives to work. We estimate a structural labor supply model for women, and use the estimated parameters to simulate the effects of alternative revenue-neutral tax systems. We find that joint taxation implies a drop in the participation rate. Conversely, working tax credit and gender-based taxation boost it, with the effects of the former concentrated on low educated women.

Keywords: female labor force participation; Italian tax system; second earner tax rate; joint taxation; gender-based taxation; working tax credit (search for similar items in EconPapers)
Date: 2013-10-02
New Economics Papers: this item is included in nep-acc, nep-dem, nep-lab, nep-lma, nep-pbe and nep-pub
Note: View the original document on HAL open archive server: https://hal.science/hal-00869315
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
https://hal.science/hal-00869315/document (application/pdf)

Related works:
Working Paper: Taxation and labor force participation: the case of Italy (2013)
Working Paper: Taxation and Labor Force Participation: The Case of Italy (2012)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-00869315

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD ().