Resumen de The effect of 1988 spanish tax reform on labour supply of married women. An empirical analysis using propensity score
Amadeo Fuenmayor Fernández, Rafael Granell Pérez, Mauro Mediavilla Bordalejo
The analysis of income tax changes over labour supply is of special interest, not only for an economic point of view but also for policy makers. Up to 1987 the Spanish Income Tax imposed the compulsory joint filing for married couples, but the 1988 reform allowed them to choose between joint taxation and separate taxation. The purpose of this work is to analyse this tax reform as a quasi-natural experiment, assessing the effects of tax changes over the labour participation. The income tax reform implied a strong reduction in tax rates for secondary earners in married couples. To find out the causal effect of this reforma we have used the difference-in-differences technique. We have used data from the IRPF IEF-AEAT Panel 1982-1998. Our results show that, as a consequence of the diferential tax changes, secondary earners pertaining to families more strongly affected by the fiscal reform (treatment group) reacted more heavily to this reform that secondary earners from families less affected by this reform (comparison group).
