SEPARATE TAXATION AND MARRIED WOMENS LABOR SUPPLY - A COMPARISON OF WEST-GERMANY AND SWEDEN

This paper uses Swedish and German micro data on wages, hours of work and human capital related variables for German and Swedish couples. When separate taxation was introduced in Sweden in 1971, incentives for married women to supply more labor to the market, was an important argument. A comparison with the behavior of German women, who are confronted with the high marginal taxes of split taxation, is a way of evaluating this policy. Effects of the specific tax systems are incorporated in logit analysis or married women's labor force participation. German and Swedish regressions differ significantly. Children are for example a major detering factor for German women's labor force participation but not for Swedish women.