Family Bargaining and Taxes: A Prolegomenon to the Analysis of Joint Taxation

44 Pages Posted: 14 Nov 2007

See all articles by Robert A. Pollak

Robert A. Pollak

Washington University in St. Louis - John M. Olin Business School; National Bureau of Economic Research (NBER); CESifo (Center for Economic Studies and Ifo Institute); IZA Institute of Labor Economics

Date Written: October 2007

Abstract

Does joint taxation disadvantage women? To answer that question, this paper begins by reviewing unitary and bargaining models of intrafamily allocation, and then discusses the determinants of bargaining power in a world without taxes. It argues that wage rates rather than earnings are determinants of bargaining power, and then argues that productivity in household production is also a source of bargaining power. In the absence of human capital effects, joint taxation does not appear to disadvantage women in either divorce threat or separate spheres bargaining. Hence, the claim that joint taxation disadvantages women, if it is correct, depends on effects that operate through the incentives to accumulate human capital. But a satisfactory analysis of the effects of taxation on human capital awaits the further development of dynamic models of family bargaining.

Keywords: joint taxation, family bargaining, household production

JEL Classification: H21, H24, D13, J22

Suggested Citation

Pollak, Robert A., Family Bargaining and Taxes: A Prolegomenon to the Analysis of Joint Taxation (October 2007). IZA Discussion Paper No. 3109, Available at SSRN: https://ssrn.com/abstract=1029916

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