The Effect of Taxation on the Hours Worked by Married Women


Leuthold, Jane H. 1978. “The Effect of Taxation on the Hours Worked by Married Women.” ILR Review 31 (4): 520-6.

Author: Jane H. Leuthold


"Most studies of the effect of taxation on labor supply have focused on prime- age males, finding generally that the labor supply function is wage inelastic or slightly backward bending.' The implication is that tax increases have a zero (or small positive) effect on the labor supply. With the rapidly growing number of females in the labor force, however, it is becoming increasingly inappropriate to judge the effect of taxation on the labor supply on the basis of the male labor supply alone. Accordingly, this study will examine the effect of taxation on the labor supply of working women.
This study examines the effect of taxation on the labor supply of married working women, an increasingly important group in the labor force. Using NLS data from 1967, 1969, and 1971 and weighted multiple regression analysis to relate desired number of hours of work to both substitution and income tax effects and to various demographic variables, the author finds that increases in taxes have a negative effect on female labor supply. She concludes, further- more, that although black and white working women respond in approximately the same manner-the presence of preschool children reduces the number of hours worked and husband's approval of working in- creases the number of hours worked, for example- home ownership, health, and years of schooling completed have a stronger influence on black women" (Leuthold 1978, 520).

Topics: Economies, Public Finance, Gender, Women, Livelihoods, Race

Year: 1978

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