Skip to main content

New estimates of labour supply elasticities for married women in Canada 1996–2005

Buy Article:

$55.00 plus tax (Refund Policy)

In this article, we estimate income and substitution labour supply and participation elasticities for Canadian married women using data from the Survey of Labour and Income Dynamics 1996–2005. We use the Canadian Tax and Credit Simulator (CTaCS) and detailed information on the structure of income at the household level to compute the marginal tax rates faced by each individual. We then use these marginal tax rates to compute net own-wage, spouse-wage, and nonlabour income. We show how the magnitude of the estimated elasticities varies depending on whether net or gross wages and income are used in the estimation procedure, and quantify biases caused by using average tax rates instead of marginal tax rates. Finally, because marginal tax rates vary significantly over the sample, we use quantile regressions to compare elasticities at different points of the hours distribution. Overall, our results show that public policies now have, on average, less scope for influencing hours of work than 10 years ago. However, the quantile results show that wives working fewer hours per week are more sensitive to changes in their own or spouses’ wages.
No Reference information available - sign in for access.
No Citation information available - sign in for access.
No Supplementary Data.
No Data/Media
No Metrics

Keywords: C25; Canada; H31; J22; elasticities; labour force participation; labour supply; taxes

Document Type: Research Article

Affiliations: 1: HEC Montreal, Institute of Applied Economics, Montreal, QC, H3T 2A7, Canada 2: Copenhagen Business School, Center for Economic and Business Research, Copenhagen, Denmark

Publication date: 2013-11-01

More about this publication?
  • Access Key
  • Free content
  • Partial Free content
  • New content
  • Open access content
  • Partial Open access content
  • Subscribed content
  • Partial Subscribed content
  • Free trial content
Cookie Policy
X
Cookie Policy
Ingenta Connect website makes use of cookies so as to keep track of data that you have filled in. I am Happy with this Find out more