The Cost of Gender Identity Norms: Evidence from a Spouse Tax Credit


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Date

2022-11

Publication Type

Working Paper

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yes

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Abstract

The standard household model predicts that couples cooperate to maximize family income. This paper shows that gender identity norms prevent family income maximization. For identification, we focus on an Italian policy that grants a large tax credit to the main earner when the second earner reports income below a cutoff. We show that second earner women maximize their family income by bunching at the cutoff, while second earner men do not. Consistent with the view that gender norms drive our results, we find larger gender bunching differences among immigrants coming from more conservative societies, and natives from more gender traditional municipalities.

Publication status

published

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Publisher

Social Science Research Network

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Subject

Gender norms; Spouse tax credit; Income taxation; Bunching

Organisational unit

02120 - Dep. Management, Technologie und Ökon. / Dep. of Management, Technology, and Ec.

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