Tax and Transfer Policies and the Female Labor Supply in the EU

2013–2014

ERSTE Foundation Fellowship for Social Research Labour Market and Employment in Central and Eastern Europe

Tax and Transfer Policies and the Female Labor Supply in the EU Klára Kalíšková

∗ † ‡

∗

† ‡

g c

t g c

t

epw ew = epw

ew = 0

u = ew − T (ew , ρ) − qw × 1(ew > 0) qw ew > 0 T (ew , ρ) ρ ew = epw

ew = 0

ew

qw ≤ epw − [T (epw , ρ) − T (0, ρ)].

u = em + ew − T (em , ew , ρ) − qm × 1(em > 0) − qw × 1(ew > 0), em

ew

qm

T (.) ew = epw

ew = 0

qw

qw ≤ epw − [T (em , epw , ρ) − T (em , 0, ρ)].

PTR ≡

[T (em , epw , ρ) − T (em , 0, ρ)] epw − qw ≤ epw epw

em

"w ≡ Empl

∂Empl [ew (1 − P T R)] , ∂[ew (1 − P T R)] Empl

Emplict = αP T Rict + β ! Xict + γt + γc + (γct ) + "ict , Emplict

P T Rict

Xict

γc

γt γct

j = 1, ..., J

P T Rjct c

j

t

g t

c

P T Rjct g

P T Rict = λP T R IVict + θ! Xict + γt + γc + (γct ) + uict , Emplict = δ P! T Rict + φ! Xict + γt + γc + (γct ) + eict , P T R IVict

P T Rjct

c

P! T Rict

c

t

δ

Participation tax rate

0 .4 .8

0 .4 .8

0 .4 .8

0 .4 .8

EE

1 2 3 4 5 6 7 8 9 10

IE

1 2 3 4 5 6 7 8 9 10

PL

1 2 3 4 5 6 7 8 9 10

UK

DK

1 2 3 4 5 6 7 8 9 10

HU

1 2 3 4 5 6 7 8 9 10

NL

1 2 3 4 5 6 7 8 9 10

SK

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10

BE

AT

Graphs by country

0 .4 .8

1 2 3 4 5 6 7 8 9 10

RO

1 2 3 4 5 6 7 8 9 10

LT

1 2 3 4 5 6 7 8 9 10

FI

1 2 3 4 5 6 7 8 9 10

CY

Income decile

1 2 3 4 5 6 7 8 9 10

PT

1 2 3 4 5 6 7 8 9 10

IT

1 2 3 4 5 6 7 8 9 10

ES

1 2 3 4 5 6 7 8 9 10

BG

1 2 3 4 5 6 7 8 9 10

SE

1 2 3 4 5 6 7 8 9 10

LU

1 2 3 4 5 6 7 8 9 10

FR

1 2 3 4 5 6 7 8 9 10

CZ

1 2 3 4 5 6 7 8 9 10

SI

1 2 3 4 5 6 7 8 9 10

LV

1 2 3 4 5 6 7 8 9 10

GR

1 2 3 4 5 6 7 8 9 10

DE

IV for participation tax rate

.8

.4

0

.8

.4

0

.8

.4

0

.8

.4

0

.8

.4

EE

1 2 3 4 5 6 7 8 9 10

IE

1 2 3 4 5 6 7 8 9 10

PL

1 2 3 4 5 6 7 8 9 10

UK

DK

1 2 3 4 5 6 7 8 9 10

HU

1 2 3 4 5 6 7 8 9 10

NL

1 2 3 4 5 6 7 8 9 10

SK

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10

1 2 3 4 5 6 7 8 9 10

BE

AT

Graphs by country

0

1 2 3 4 5 6 7 8 9 10

RO

1 2 3 4 5 6 7 8 9 10

LT

1 2 3 4 5 6 7 8 9 10

FI

1 2 3 4 5 6 7 8 9 10

CY

Income decile

1 2 3 4 5 6 7 8 9 10

PT

1 2 3 4 5 6 7 8 9 10

IT

1 2 3 4 5 6 7 8 9 10

ES

1 2 3 4 5 6 7 8 9 10

BG

1 2 3 4 5 6 7 8 9 10

SE

1 2 3 4 5 6 7 8 9 10

LU

1 2 3 4 5 6 7 8 9 10

FR

1 2 3 4 5 6 7 8 9 10

CZ

1 2 3 4 5 6 7 8 9 10

SI

1 2 3 4 5 6 7 8 9 10

LV

1 2 3 4 5 6 7 8 9 10

GR

1 2 3 4 5 6 7 8 9 10

DE

R2

R2

<

<

<

R2 < <

<

R2 < <

<

R2 < <

<

R2

R2 < <

<

R2

R2 < <

<

R2 < <

<

Density

0 2 4 6 8

0 2 4 6 8

6

4

2

0

6

4

2

0

10

5

0

0

0

0

0

.5

SK, 2007

.5

NL, 2007

.5

HU, 2007

.5

DK, 2007

.5

AT, 2007

1

1

1

1

1

0

0

0

0

0

.5

UK, 2007

.5

PL, 2007

.5

IE, 2007

.5

EE, 2007

.5

BE, 2007

Graphs by country and year

0

0 2 4 6 8 10 5 0 0 1 2 3 4 10 15 5 0 0 2 4 6 8

1

1

1

1

1

6 4 2 0 10 5 0 10 5 0 0 2 4 6 8 0

0

0

0

1

1

1

1

0

0

0

0

.5

RO, 2007

.5

LT, 2007

.5

FI, 2007

.5

CY, 2007

Participation tax rate

.5

PT, 2007

.5

IT, 2007

.5

ES, 2007

.5

BG, 2007 10 20 30 0 0 2 4 6 8 0 5 10 15 20

1

1

1

1

5 0

10 15

0 2 4 6 8 0 2 4 6 8 0 1 2 3 4 10 15 5 0 0

0

0

0

.5

SE, 2007

.5

LU, 2007

.5

FR, 2007

.5

CZ, 2007

1

1

1

1

6 4 2 0 10 15 5 0 0 5 10 15 20 10 5 0 0

0

0

0

.5

SI, 2007

.5

LV, 2007

.5

GR, 2007

.5

DE, 2007

1

1

1

1

Density

0 2 4 6 8

10

5

0

10

5

0

10 15

5

0

10

5

0

0

0

0

0

.5

SK, 2007

.5

NL, 2007

.5

HU, 2007

.5

DK, 2007

.5

AT, 2007

1

1

1

1

1

0

0

0

0

0

.5

UK, 2007

.5

PL, 2007

.5

IE, 2007

.5

EE, 2007

.5

BE, 2007

Graphs by country and year

0

10 15 5 0 0 5 10 15 20 10 15 5 0 10 15 5 0 10 15 5 0

1

1

1

1

1

10 15 5 0 10 5 0 0 10 20 30 40 0

0

0

0

.5

PT, 2007

.5

IT, 2007

.5

ES, 2007

.5

BG, 2007

1

1

1

1

0

0

0

0

.5

RO, 2007

.5

LT, 2007

.5

FI, 2007

.5

CY, 2007

1

1

1

1

IV for participation tax rate

0 2 4 6 8

0 5 10 15 20 10 20 30 0 10 20 30 0 10 20 30 0

0 5 10 15 20 10 5 0 6 4 2 0 10 5 0 0

0

0

0

.5

SE, 2007

.5

LU, 2007

.5

FR, 2007

.5

CZ, 2007

1

1

1

1

10 5 0 0 10 20 30 40 10 20 30 0 0 5 10 15 20 0

0

0

0

.5

SI, 2007

.5

LV, 2007

.5

GR, 2007

.5

DE, 2007

1

1

1

1