Taxation, aggregates and the household

Nezih Guner, Remzi Kaygusuz () and Gustavo Ventura

No 660, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: We evaluate reforms to the U.S. tax system in a dynamic setup with heterogeneous married and single households, and with an operative extensive margin in labor supply. We restrict our model with observations on gender and skill premia, labor force participation of married females across skill groups, and the structure of marital sorting. We study four revenue-neutral tax reforms: a proportional consumption tax, a proportional income tax, a progressive consumption tax, and a reform in which married individuals file taxes separately. Our findings indicate that tax reforms are accompanied by large and differential effects on labor supply: while hours per-worker display small increases, total hours and female labor force participation increase substantially. Married females account for more than 50% of the changes in hours associated to reforms, and their importance increases sharply for values of the intertemporal labor supply elasticity on the low side of empirical estimates. Tax reforms in a standard version of the model result in output gains that are up to 15% lower than in our benchmark economy.

Keywords: Taxation (search for similar items in EconPapers)
Date: 2008
New Economics Papers: this item is included in nep-dge, nep-mac and nep-pub
References: Add references at CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
http://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=1119 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=1119 [301 Moved Permanently]--> https://www.minneapolisfed.org/research/common/pub_detail.cfm?pb_autonum_id=1119)
http://www.minneapolisfed.org/research/WP/WP660.pdf

Related works:
Working Paper: Taxation, Aggregates and the Household (2008)
Working Paper: Taxation, Aggregates and the Household (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:660

Access Statistics for this paper

More papers in Working Papers from Federal Reserve Bank of Minneapolis Contact information at EDIRC.
Bibliographic data for series maintained by Kate Hansel ().