Optimal Income Taxation of Lone Mothers

An Empirical Comparison of the UK and Germany

Dados Bibliográficos

ID9704756
AutoresRichard Blundell (0000-0003-1588-2299, Institute for Fiscal Studies and University College London), Mike Brewer (0000-0003-0759-0384, Institute for Fiscal Studies), Peter Haan (0009-0008-7003-4982, German Institute for Economic Research, Berlin (DIW Berlin)), Andrew Shephard (0000-0002-3157-415X, Institute for Fiscal Studies and University College London)
Ano2009
Volume119
Fascículo535
PáginasF101-F121
Data de publicação2009-02-01
Peer ReviewedSim
Open AccessSim
TipoARTICLE
PeriódicoThe Economic Journal (JOURNAL)
Identificadores do periódicoISSN: 0013-0133 • E-ISSN: 1468-0297
EditoraOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2008.02261.x
OpenAlexW1982224745
IdiomaEN
Citações recebidas7
Referências citadas19

Optimal tax rules are used to evaluate the optimality of taxation for lone mothers in Germany and Britain. The theoretical model is combined with elasticities derived from the structural estimation of lone mothers' labour supply. For both countries we do not find that in-work credits with marginal tax rates are optimal. However we show that when the government has a low taste for redistribution, out-of-work transfers and transfer for the working poor are very similar, implying very low marginal tax rates. Further, the current tax and transfer systems in both countries are shown to be optimal only if governments have a much higher welfare value for income received by the non-workers than the working poor. Copyright © Institute of Fiscal Studies. Journal compilation © Royal Economic Society 2009

Demographic economics · Earned income tax credit · Economics · Labour economics · Labour supply · Market economy · Microeconomics · Optimal tax · Redistribution (election · Transfer (computing · Welfare · Work (physics · Financial Literacy, Pension, Retirement Analysis · Fiscal Policy and Economic Growth · Gender, Labor, and Family Dynamics