Why are Mothers Working Longer Hours in Austria than in Germany?: A Comparative Micro Simulation Analysis

Dearing, Helene and Hofer, Helmut and Lietz, Christine and Winter-Ebmer, Rudolf and Wrohlich, Katharina (June 2007) Why are Mothers Working Longer Hours in Austria than in Germany?: A Comparative Micro Simulation Analysis. IHS Economics Series 213

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Abstract or Table of Contents

Abstract: Labor force participation rates of mothers in Austria and Germany are similar, however full-time employment rates are much higher among Austrian mothers. In order to find out to what extent these differences can be attributed to differences in the tax transfer-system, we perform a comparative micro simulation exercise. After estimating structural labor supply models of both countries, we interchange two important institutional characteristics of the two countries, namely (i) the definition of the tax unit within the personal income tax and (ii) the parental leave benefit scheme. As our analysis shows, differences in mothers' employment patterns can partly be explained by the different tax systems: While Germany has a system of joint taxation with income splitting for married couples, Austria taxes everyone individually, which leads to lower marginal tax rates for secondary earners than the German system.;

Item Type: IHS Series
Keywords: 'Labor supply' 'Micro simulation' 'Family policy' 'Income taxation' 'Austria' 'Germany'
Classification Codes (e.g. JEL): J22, H31, H24
Status: Published
Date Deposited: 26 Sep 2014 10:38
Last Modified: 22 Jul 2017 00:52
URI: http://irihs.ihs.ac.at/id/eprint/1777

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