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- Title
Why Are Mothers Working Longer Hours in Austria than in Germany? A Comparative Microsimulation Analysis.
- Authors
Dearing, Helene; Hofer, Helmut; Lietz, Christine; Winter-Ebmer, Rudolf; Wrohlich, Katharina
- Abstract
Labour force participation rates of mothers in Austria and Germany are similar; however, full-time employment rates are much higher among Austrian mothers. In order to find out to what extent these differences can be attributed to differences in the tax-transfer system, we perform a comparative microsimulation exercise. After estimating structural labour supply models for both countries, we interchange two important institutional characteristics of the two countries - namely, (i) the definition of the tax unit within the personal income tax and (ii) the parental leave benefit scheme. As our analysis shows, differences in mothers’employment patterns can partly be explained by the different tax systems: while Germany has a system of joint taxation with income splitting for married couples, Austria taxes everyone individually, which leads to lower marginal tax rates for secondary earners than in the German system.
- Subjects
GERMANY; AUSTRIA; EMPLOYMENT of mothers; EMPLOYMENT of married people; FACTORS of production; HUMAN capital; LABOR costs; TAX auditing; WAGE taxation; LABOR supply
- Publication
Fiscal Studies, 2007, Vol 28, Issue 4, p463
- ISSN
0143-5671
- Publication type
Article
- DOI
10.1111/j.1475-5890.2007.00064.x