An evaluation of income splitting with variable female labour supply

Glenn Jones, Elizabeth Savage

Research output: Contribution to journalReview articleResearchpeer-review

Abstract

Debate on the tax unit in Australia often involves claims that a system which allows spouses to split their incomes for the purposes of taxation is superior to an individual based system. In this paper we estimate a female labour supply model on data for married couples and use it to simulate the effects of a switch from the 1985/ 86 progressive individual personal income tax system to one allowing full income splitting. We analyze distributional outcomes and, at least as far as female labour supply is concerned, change in the excess burden of the tax system. The impacts depend upon the way in which the policy is made revenue neutral. We consider two tax replacement scenarios. We quantify the impact on female hours of work and investigate how welfare impacts vary by household characteristics.

LanguageEnglish
Pages224-235
Number of pages12
JournalEconomic Record
Volume72
Issue number218
Publication statusPublished - Sep 1996

Fingerprint

Female labor supply
Income
Evaluation
Tax system
Revenue
Spouses
Scenarios
Hours of work
Personal income tax
Household
Excess burden
Unit tax
Tax
Replacement
Taxation

Cite this

Jones, Glenn ; Savage, Elizabeth. / An evaluation of income splitting with variable female labour supply. In: Economic Record. 1996 ; Vol. 72, No. 218. pp. 224-235.
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Jones, G & Savage, E 1996, 'An evaluation of income splitting with variable female labour supply', Economic Record, vol. 72, no. 218, pp. 224-235.

An evaluation of income splitting with variable female labour supply. / Jones, Glenn; Savage, Elizabeth.

In: Economic Record, Vol. 72, No. 218, 09.1996, p. 224-235.

Research output: Contribution to journalReview articleResearchpeer-review

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