Template-Type: ReDIF-Paper 1.0
Title: Taxing Families: The Impact of Child-Related Transfers on Maternal Labor Supply
Author-Name: Anne Hannusch
Author-Email: hannusch@uni-mannheim.de
Classification-JEL: E62, H31, J12, J22
Keywords: Maternal Labor Supply, Two-earner Households, Family Transfers, Taxation

Abstract: 
Childbirth causes persistent gender differences in labor force participation and the difference in employment rates of married women with and without pre-school children varies
substantially across countries. To what extent can child-related transfers account for this
differential? To answer this question, I develop a life-cycle model of joint labor supply,
in which female human capital evolves endogenously and a fraction of households has
access to informal childcare. I calibrate the model to the US and Denmark, two countries
in which the gap in employment rates of women with and without pre-school children
differs in sign and magnitude: the gap is 13.2% in the US and -3.7% in Denmark. After
taking the labor income tax treatment of married couples and variation in childcare fees
into account, I find that child-related transfers are key to explaining the positive gap in
the US and the negative gap in Denmark. I show that this mechanism is quantitatively
important to account for variation in the maternal participation gap across other European
countries as well.



Note: 
Length: 52
Creation-Date: 2019-01
Revision-Date: 
File-URL: https://www.crctr224.de/research/discussion-papers/archive/dp067
File-Format: application/pdf
Handle: RePEc:bon:boncrc:CRCTR224_2019_067