For Love or Money? The Impact of Income Taxes on Marriage

Bibliographic Data

ID9727624
AuthorsJames Alm (0000-0003-4008-1637, University of Colorado System), Leslie A Whittington (Georgetown University)
Year1999
Volume66
Issue263
Pages297-316
Publication date1999-08-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueEconomica (JOURNAL)
Journal identifiersISSN: 0013-0427 • E-ISSN: 1468-0335
PublisherWiley (PUBLISHER • GB)
DOI10.1111/1468-0335.00172
OpenAlexW2001255646
LanguageEN
Citations received16
References cited19

There is a large empirical literature that demonstrates the importance of economic factors in the decision to marry. Taxes, however, have been largely overlooked as a determinant of marriage, even though the tax system in the United States is not marriage‐neutral; that is, when two individuals marry, their marital income tax burden is typically different—sometimes higher, sometimes lower—than their combined single income tax obligations. In this paper we explore the impact of the federal individual income tax, as well as other economic and demographic variables, on the marriage decisions of individuals. Using longitudinal data from the Panel Study on Income Dynamics for the period 1968–92, we estimate a discrete‐time hazard model of the time to first marriage. We find that the probability of marriage is significantly affected by a range of economic and demographic variables. Importantly, we find that an increase in total income taxes paid by married versus single women has a negative effect on the likelihood of marriage, and that the change in the marginal tax rate is also a significant determinant of marriage in some cases; in contrast, the tax effects are rarely significant in determining marriage probabilities among men, although there are some differential responses by race. In general, the impacts of the income tax variables, even when statistically significant, are small

Adjusted gross income · Demographic economics · Differential (mechanical device) · Econometrics · Economics · Gross income · Income tax · Labour economics · Marital status · Panel data · Panel Study of Income Dynamics · Population · Public economics · State income tax · Tax reform · Demography · Family Dynamics and Relationships · Fiscal Policy and Economic Growth · Gender, Labor, and Family Dynamics

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