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Till taxes keep us apart? The impact of the marriage tax on the marriage rate

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  • Nadia Myohl

    (Swiss Institute for Empirical Economic Research, University of St.Gallen)

Abstract

Married couples can face a higher or lower tax burden than cohabitating couples with the same income when the former are taxed as one unit. I study the effect of such joint income taxation on the marriage rate in Switzerland, where tax differentials between married and cohabitating couples vary considerably across cantons. For this purpose, I construct a dataset containing sociodemographic and -economic variables on every individual living in Switzerland and use household-level information to identify cohabitating couples. Using a simulated instrumental variable approach, I find a negative impact of joint income taxation on the marriage rate for couples married between 2012 and 2019. The effect is driven by households without children and from the lower end of the income distribution.

Suggested Citation

  • Nadia Myohl, 2024. "Till taxes keep us apart? The impact of the marriage tax on the marriage rate," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(2), pages 552-592, April.
    • Handle: RePEc:kap:itaxpf:v:31:y:2024:i:2:d:10.1007_s10797-023-09784-y
    DOI: 10.1007/s10797-023-09784-y
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    More about this item

    Keywords

    Income taxation; Marriage penalty; Taxation of married couples;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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