scholarly journals Work Incentives and the Two-Earner Deduction

1985 ◽  
Vol 13 (1) ◽  
pp. 63-73 ◽  
Author(s):  
Jane H. Leuthold

One consequence of the two-earner deduction is to lower the marginal tax rate on the first dollar earned by secondary workers and to encourage their labor force participation. This study estimates the potential impact of the two-earner deduction on the probability of labor force participation by married women and tests the sensitivity of labor force participation levels to changes in the rate of deduction. Probit estimates of a labor force probability model suggest that the two-earner deduction increases the probability that a married woman work outside the home and that the effect is stronger the higher the deduction rate and the greater the after-tax income of the husband. Data for the study were drawn from the 1979 Michigan Survey of Income Dynamics.

1994 ◽  
Vol 54 (1) ◽  
pp. 64-84 ◽  
Author(s):  
T. Aldrich Finegan ◽  
Robert A. Margo

Economic analysis of the labor supply of married women has long emphasized the impact of the unemployment of husbands—the added worker effect. This article re-examines the magnitude of the added worker effect in the waning years of the Great Depression. Previous studies of the labor supply of married women during this period failed to take account of various institutional features of New Deal work relief programs, which reduced the size of the added worker effect.


2020 ◽  
Vol 12 (2) ◽  
pp. 167-193
Author(s):  
Domenico Ferraro ◽  
Giuseppe Fiori

We study how the changing demographic composition of the US labor force has affected the response of the unemployment rate to marginal tax rate shocks. Using narratively identified tax changes as proxies for structural shocks, we establish that the responsiveness of the unemployment rates to tax changes varies significantly across age groups: the unemployment rate response of the young is nearly twice as large as that of the old. This heterogeneity is the channel through which shifts in the age composition of the labor force impact the response of the unemployment rate to tax cuts. We find that the aging of the baby boomers considerably reduces the effects of tax cuts on aggregate unemployment. (JEL E24, E62, H24, H31, J21)


1995 ◽  
Vol 24 (1) ◽  
pp. 45-64 ◽  
Author(s):  
Augustin Kwasi Fosu

The study theoretically argues that differential economic conditions constitute an important rationale for structural differences in labor force participation (LFP) between black and white married women. Empirical evidence based on 1980 census data for metropolitan statistical areas provides support for the concomitant hypotheses. Not only is the LFP propensity for black wives larger, but also it is relatively insensitive to the arguments of the LFP function. Thus policies designed to influence the LFP of these two racial groups must internalize the differential economic conditions between them.


2011 ◽  
Vol 46 (2) ◽  
pp. 261-294 ◽  
Author(s):  
Margaret Maurer-Fazio ◽  
Rachel Connelly ◽  
Lan Chen ◽  
Lixin Tang

Sign in / Sign up

Export Citation Format

Share Document