What’s best for women: gender based taxation, wage subsidies or basic income?

Publication type

EUROMOD Working Paper Series

Series Number



EUROMOD Working Paper Series


Publication date

May 1, 2013


Gender based taxation (GBT) has been recently proposed as a promising policy in order to
improve women’s status in the labour market and within the family. We use a microeconometric
model of household labour supply in order to evaluate, with Italian data, the behavioural and
welfare effects of GBT as compared to other policies based on different optimal taxation
principles. The comparison is interesting because GBT, although technically correct, might face
implementation difficulties not shared by other policies that in turn might produce comparable
benefits. The simulation procedure accounts for the constraints implied by fiscal neutrality and
market equilibrium. Our results support to some extent the expectations of GBT’s proponents.
However it is not an unquestionable success. GBT induces a modest increase of women’s
employment, but similar effects can be attained by universal subsidies on low wages. When the
policies are evaluated in terms of welfare, GBT ranks first among single women but for the whole
population the best policies are subsidies on low wages, unconditional transfers or a combination
of the two.


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