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Family Tax Splitting : A Microsimulation of Its Potential Labour Supply and Intra-household Welfare Effects in Germany

Author

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  • Miriam Beblo

    (Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim)

  • Denis Beninger

    (Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim)

  • Francois Laisney

    (BETA - Bureau d'Économie Théorique et Appliquée - INRA - Institut National de la Recherche Agronomique - UNISTRA - Université de Strasbourg - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique, Centre for European Economic Research (Mannheim, Germany) - Zentrum für Europäische Wirtschaftsforschung (ZEW) - Universität Mannheim)

Abstract

This paper assesses the effects that an introduction of the French family splitting mechanism would have on German families' labour supply and intra-household consumption behaviour. We use simulated real world microdata created by means of a 'deterministic' collective labour supply model. The data are generated by a compound procedure of estimation and calibration based on GSOEP data. In a microsimulation the present tax-benefit system with child benefit/allowance is replaced by a tax scheme with family splitting. The resulting changes in labour supply are surprisingly small, even for women. Welfare effects are also modest, but differ for husbands and wives.

Suggested Citation

  • Miriam Beblo & Denis Beninger & Francois Laisney, 2022. "Family Tax Splitting : A Microsimulation of Its Potential Labour Supply and Intra-household Welfare Effects in Germany," Working Papers hal-00279012, HAL.
    • Handle: RePEc:hal:wpaper:hal-00279012
    DOI: 10.2139/ssrn.423403
    Note: View the original document on HAL open archive server: https://hal.science/hal-00279012
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    References listed on IDEAS

    as
    1. Donni, Olivier, 2003. "Collective household labor supply: nonparticipation and income taxation," Journal of Public Economics, Elsevier, vol. 87(5-6), pages 1179-1198, May.
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    4. repec:adr:anecst:y:1988:i:11:p:06 is not listed on IDEAS
    5. Chiappori, Pierre-Andre, 1992. "Collective Labor Supply and Welfare," Journal of Political Economy, University of Chicago Press, vol. 100(3), pages 437-467, June.
    6. Laisney, François & Beninger, Denis & Beblo, Miriam, 2003. "Welfare Analysis of Fiscal Reforms: Does the Representation of the Family Decision Process Matter? Evidence for Germany," ZEW Discussion Papers 03-31, ZEW - Leibniz Centre for European Economic Research.
    7. Laisney, François & Beninger, Denis, 2002. "Comparison between unitary and collective models of household labor supply with taxation," ZEW Discussion Papers 02-65, ZEW - Leibniz Centre for European Economic Research.
    8. Anthony B. Atkinson & François Bourguignon & Pierre-André Chiappori, 1988. "Fiscalité et transferts: une comparaison franco-britannique," Annals of Economics and Statistics, GENES, issue 11, pages 117-140.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Eva Schlenker, 2009. "Frauen als Stille Reserve im Ingenieurwesen," Diskussionspapiere aus dem Institut für Volkswirtschaftslehre der Universität Hohenheim 315/2009, Department of Economics, University of Hohenheim, Germany.
    2. Donni, Olivier & Molina, José Alberto, 2018. "Household Collective Models: Three Decades of Theoretical Contributions and Empirical Evidence," IZA Discussion Papers 11915, Institute of Labor Economics (IZA).
    3. Kristian Orsini & Amadéo Spadaro, 2006. "Strategic weight within couples: a microsimulation approach," Working Papers halshs-00590395, HAL.
    4. Volker Meier & Matthias Wrede, 2013. "Reducing the excess burden of subsidizing the stork: joint taxation, individual taxation, and family tax splitting," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(3), pages 1195-1207, July.
    5. Bautista Lacambra, Sergio, 2020. "Household labor supply: Collective results for certain developed countries," MPRA Paper 101514, University Library of Munich, Germany.
    6. Kristian Orsini & Amadéo Spadaro, 2006. "Strategic weight within couples: a microsimulation approach," PSE Working Papers halshs-00590395, HAL.
    7. Kristian Orsini & Amadéo Spadaro, 2005. "Sharing resources within the household: a multi-country microsimulation analysis of the determinants of intrahousehold "strategic weight" differentials and their distributional outcomes," PSE Working Papers halshs-00590860, HAL.
    8. Denis Beninger & Holger Bonin & Julia Horstschräer & Grit Mühler, 2010. "Wirkungen eines Betreuungsgeldes bei bedarfsgerechtem Ausbau frühkindlicher Kindertagesbetreuung: eine Mikrosimulationsstudie," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 79(3), pages 147-168.
    9. Steiner, Viktor & Wrohlich, Katharina, 2006. "Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution and Work Incentives?," IZA Discussion Papers 2245, Institute of Labor Economics (IZA).
    10. Kristian Orsini & Amadéo Spadaro, 2005. "Sharing resources within the household: a multi-country microsimulation analysis of the determinants of intrahousehold "strategic weight" differentials and their distributional outcomes," Working Papers halshs-00590860, HAL.
    11. Alexandre Baclet & Fabien Dell & Katharina Wrohlich, 2005. "Income Taxation and Household Size: Would French Family Splitting Make German Families Better Off ?," Discussion Papers of DIW Berlin 542, DIW Berlin, German Institute for Economic Research.
    12. Callan, Tim & van Soest, Arthur & Walsh, John R., 2007. "Tax Structure and Female Labour Market Participation: Evidence from Ireland," IZA Discussion Papers 3090, Institute of Labor Economics (IZA).
    13. Bergs Christian & Fuest Clemens & Peichl Andreas & Schaefer Thilo, 2007. "Reformoptionen der Familienbesteuerung: Aufkommens-, Verteilungs- und Arbeitsangebotseffekte," Review of Economics, De Gruyter, vol. 58(1), pages 1-27, April.
    14. Fabien Dell & Katharina Wrohlich, 2006. "Income Taxation and its Family Components in France," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(4), pages 50-54, 02.
    15. Fabien Dell & Katharina Wrohlich, 2006. "Income Taxation and its Family Components in France," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 4(04), pages 50-54, February.
    16. Djurdjevic, Dragana, 2005. "Women's Labour Supply after Childbirth: An Empirical Analysis for Switzerland," Darmstadt Discussion Papers in Economics 144, Darmstadt University of Technology, Department of Law and Economics.
    17. Clauss, Markus & Schnabel, Reinhold, 2008. "Distributional and behavioural effects of the German labour market reform," Zeitschrift für ArbeitsmarktForschung - Journal for Labour Market Research, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany], vol. 41(4), pages 431-446.
    18. Peter Haan, 2004. "Discrete Choice Labor Supply: Conditional Logit vs. Random Coefficient Models," Discussion Papers of DIW Berlin 394, DIW Berlin, German Institute for Economic Research.
    19. S. Verzillo & A. Santoro & M. Mezzanzanica, 2017. "Family splitting versus joint taxation: a case-study," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 34(2), pages 337-354, August.
    20. Viktor Steiner & Katharina Wrohlich, 2008. "Introducing Family Tax Splitting in Germany: How Would It Affect the Income Distribution, Work Incentives, and Household Welfare?," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 64(1), pages 115-142, March.
    21. Beninger, Denis & Bonin, Holger & Clauss, Markus & Horstschräer, Julia & Mühler, Grit, 2009. "Fiskalische Auswirkungen sowie arbeitsmarkt- und verteilungspolitische Effekte einer Einführung eines Betreuungsgeldes für Kinder unter 3 Jahren: Studie im Auftrag des Bundesministeriums der Finanzen.," ZEW Expertises, ZEW - Leibniz Centre for European Economic Research, number 110517.
    22. Peter Haan, "undated". "Conditional logit versus random coefficient models: An analysis using GLLAMM," German Stata Users' Group Meetings 2004 7, Stata Users Group.
    23. Hans Fehr & Manuel Kallweit & Fabian Kindermann, 2013. "Reforming Family Taxation in Germany: Labor Supply vs. Insurance Effects," SOEPpapers on Multidisciplinary Panel Data Research 613, DIW Berlin, The German Socio-Economic Panel (SOEP).
    24. Viktor Steiner & Katharina Wrohlich, 2006. "Die Wirkung ausgewählter familienpolitischer Instrumente auf das Arbeitsangebot von Eltern: Expertise für den Familienbericht der Bundesregierung," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 16, number pbk16.

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    More about this item

    Keywords

    Collective model; Household labour supply; Intra-household allocation; Tax reform; Family splitting;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • J12 - Labor and Demographic Economics - - Demographic Economics - - - Marriage; Marital Dissolution; Family Structure

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