Analyzing female labor supply -- Evidence from a Dutch tax reform
Bas van der Klaauw
Labour Economics 19, 271-280 (2012).
Among OECD countries, the Netherlands has an average female labor force participation, but by far the highest rate of part-time work. This paper investigates the extent
to which married women respond to financial incentives. We exploit exogenous variation caused by a substantial Dutch tax reform in 2001. Our main conclusion is that
the positive significant effect of the tax reform on labor force participation dominates the negative insignificant effect on working hours. The latter contradicts the common
empirical finding of positive wage elasticities. Our preferred explanation is that women respond more to changes in tax allowances than to changes in marginal tax rates.
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Last updated: January 11, 2012.