Leonie is a PhD candidate at the Center for Economic Studies (CES) at LMU Munich. She previously obtained a BSc in Economics from the University of Bonn and a MSc in Economic Policy from UCL. Before starting her PhD she worked as a research assistant at the Centre for Business Taxation (CBT) at the University of Oxford.
Her research empirically studies the effects of tax policy on individuals’ behaviour with a focus on gender. Specifically, she examines how a move from joint towards individual taxation affect spouses’ labour supply, the partner pay gap and consequently gender equality. In addition, to disentangle gender norms and the role of joint taxation, she leverages the introduction of joint taxation for same-sex couples to explore spouses’ relative income and labour supply responses in Germany. Other ongoing work analyses the impact of parental leave benefits on pre-birth earnings.
How does a move from joint taxation to individual taxation affect gender equality? Married couples can choose between individual or joint (withholding) income taxation in Germany. The 2013 withholding income tax reform introduced individual taxation as the default for newlywed spouses. This implied lower average and marginal tax rates for the secondary earner, typically the wife. I use newly available data for the universe of German taxpayers and leverage the default introduction as an exogenous change to the share of newlyweds choosing individual taxation. I establish two main results. First, the share of newlyweds choosing the individual tax schedule increases by 24% after the default introduction. Thus, the secondary earner faces lower average and marginal tax rates. Second, female labor income significantly increases in the post marriage years relative to before the default introduction. My findings suggest that a move from joint taxation towards individual taxation of spouses can improve gender equality in earnings.
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