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Keywords = marriage bonus

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24 pages, 1437 KiB  
Article
The Lock-in Effect of Marriage: Work Incentives after Saying “I Do”
by Michael Christl, Silvia De Poli and Viginta Ivaškaitė-Tamošiūnė
Soc. Sci. 2022, 11(11), 493; https://doi.org/10.3390/socsci11110493 - 24 Oct 2022
Cited by 1 | Viewed by 2739
Abstract
In this paper, we use EUROMOD, the tax-benefit microsimulation model of the European Union, to investigate the impact of marriage-related tax-benefit instruments on the financial incentives to work of married couples. For each spouse, we estimate their individual marginal effective tax rate and [...] Read more.
In this paper, we use EUROMOD, the tax-benefit microsimulation model of the European Union, to investigate the impact of marriage-related tax-benefit instruments on the financial incentives to work of married couples. For each spouse, we estimate their individual marginal effective tax rate and net replacement rate before and after marriage. We show that the marriage bonus, which is economically significant in eight European countries, decreases the work incentives for women, particularly on the intensive margin. In contrast, for men the incentives on the intensive margin increase once they are married, pointing to the marriage-biased and gender-biased tax-benefit structures in the analysed countries. Our results suggest that marriage bonuses contribute to a lock-in effect, where second earners, typically women, are incentivised to work less, with negative economic consequences. Full article
(This article belongs to the Special Issue Dynamics of Gender Income Inequality)
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