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Income splitting, specialization, and intra-family distribution

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  • Elisabeth Gugl

Abstract

Income splitting for tax purposes results in more specialization of wives, but does this in turn generate more gender inequality? In my dynamic bargaining model with a divorce threatpoint, I find that who controls the couple's labour supply plays a crucial role in establishing this link. If spouses choose their labour supply non-cooperatively, only the husband's increase - but not her own decrease - in labour supply introduces a negative term in the wife's change in welfare. If the wife does not control her own labour supply, a decrease in her own labour supply introduces an additional negative term.

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  • Elisabeth Gugl, 2009. "Income splitting, specialization, and intra-family distribution," Canadian Journal of Economics, Canadian Economics Association, vol. 42(3), pages 1050-1071, August.
    • Handle: RePEc:cje:issued:v:42:y:2009:i:3:p:1050-1071
    DOI: 10.1111/j.1540-5982.2009.01538.x
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    Cited by:

    1. Patricia Apps & Ray Rees, 2018. "Optimal family taxation and income inequality," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(5), pages 1093-1128, October.
    2. Volker Meier & Helmut Rainer, 2012. "Beyond Ramsey: Gender-Based Taxation with Non-Cooperative Couples," CESifo Working Paper Series 3966, CESifo.
    3. Shelly Lundberg & Aloysius Siow, 2017. "Canadian contributions to family economics," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 50(5), pages 1304-1323, December.
    4. Gugl, Elisabeth & Leroux, Justin, 2011. "Share the gain, share the pain? Almost transferable utility, changes in production possibilities, and bargaining solutions," Mathematical Social Sciences, Elsevier, vol. 62(3), pages 133-143.
    5. Alexander Kemnitz & Marcel Thum, 2015. "Gender Power, Fertility, and Family Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(1), pages 220-247, January.
    6. Meier, Volker & Rainer, Helmut, 2015. "Pigou meets Ramsey: Gender-based taxation with non-cooperative couples," European Economic Review, Elsevier, vol. 77(C), pages 28-46.
    7. Linda Cohen & Amihai Glazer, 2017. "Bargaining within the family can generate a political gender gap," Review of Economics of the Household, Springer, vol. 15(4), pages 1399-1413, December.
    8. Patricia Apps & Ray Rees, 2016. "Optimal Taxation, Income Inequality and the Household," CESifo Working Paper Series 5845, CESifo.
    9. Alberto Alesina & Andrea Ichino & Loukas Karabarbounis, 2011. "Gender-Based Taxation and the Division of Family Chores," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 1-40, May.
    10. Derek Messacar, 2022. "Labor Supply Responses to Income Taxation among Older Couples: Evidence from a Canadian Reform," Cahiers de recherche / Working Papers 10, Institut sur la retraite et l'épargne / Retirement and Savings Institute.
    11. Gahramanov Emin & Gaibulloev Khusrav & Younas Javed, 2019. "Parental Transfers, Intra-household Bargaining and Fertility Decision," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 19(1), pages 1-17, January.

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    More about this item

    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation

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