Discussion of Taxes and Market Hours - the Role of Gender and Skill by Robert Duval-Hernándex, Lei Fang and L. Rachel Ngai

Transcription

1 Discussion of Taxes and Market Hours - the Role of Gender and Skill by Robert Duval-Hernándex, Lei Fang and L. Rachel Ngai Hao Jin WISE and School of Economics Xiamen University Tsinghua Workshop in Macroeconomics 2017 Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

2 Overview of the Paper This paper examines the cross-country relationship between taxes and market hours, in particular across gender and skill groups. Cross-country: Females-Low Skilled Females-High Skilled Market Hours Males-Low Skilled Males-High Skilled Taxes + Subsidies A very nice paper that connects theory with data. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

3 Overview of the Paper This paper examines the cross-country relationship between taxes and market hours, in particular across gender and skill groups. Cross-country: Females-Low Skilled Females-High Skilled Market Hours Males-Low Skilled Males-High Skilled Taxes + Subsidies A very nice paper that connects theory with data. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

4 Overview of the Paper This paper examines the cross-country relationship between taxes and market hours, in particular across gender and skill groups. Cross-country: Females-Low Skilled Females-High Skilled Market Hours Males-Low Skilled Males-High Skilled Taxes + Subsidies A very nice paper that connects theory with data. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

5 Summary of the Paper: Empirical Findings Difference in market hours is mainly due to market hours of women, in particular low-skilled women, and in service sector. Table 1: Decomposition of Difference in Market Hours with respect to the U.S. Population Group Sector Fraction Females Females Males Males Substit. Non-Substit. of US Low High Low High Services Services Goods Canada Nordic Central Southern Taxes and subsidies also vary across countries. Table 2: Taxes and Subsidies Income Tax Consumption Tax Subsidy Rate Canada Nordic Central Southern US Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

6 Summary of the Paper: Empirical Findings Difference in market hours is mainly due to market hours of women, in particular low-skilled women, and in service sector. Table 1: Decomposition of Difference in Market Hours with respect to the U.S. Population Group Sector Fraction Females Females Males Males Substit. Non-Substit. of US Low High Low High Services Services Goods Canada Nordic Central Southern Taxes and subsidies also vary across countries. Table 2: Taxes and Subsidies Income Tax Consumption Tax Subsidy Rate Canada Nordic Central Southern US Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

7 Summary of the Paper: Theory Model elements Three market sectors: goods, non-substitutable services, and substitutable services. Four types of labor: male and female with low or high skill. Five time allocations: three market sectors, home work, and leisure. Two margins of substitutions market vs. home work work vs. leisure Taxes affect both margins, social subsidies affect the first margin low-skilled women are most affected because the lowest wages and comparative advantage in home production. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

8 Summary of the Paper: Theory Model elements Three market sectors: goods, non-substitutable services, and substitutable services. Four types of labor: male and female with low or high skill. Five time allocations: three market sectors, home work, and leisure. Two margins of substitutions market vs. home work work vs. leisure Taxes affect both margins, social subsidies affect the first margin low-skilled women are most affected because the lowest wages and comparative advantage in home production. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

9 Summary of the Paper: Theory Model elements Three market sectors: goods, non-substitutable services, and substitutable services. Four types of labor: male and female with low or high skill. Five time allocations: three market sectors, home work, and leisure. Two margins of substitutions market vs. home work work vs. leisure Taxes affect both margins, social subsidies affect the first margin low-skilled women are most affected because the lowest wages and comparative advantage in home production. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

10 Summary of the Paper: Theory Model elements Three market sectors: goods, non-substitutable services, and substitutable services. Four types of labor: male and female with low or high skill. Five time allocations: three market sectors, home work, and leisure. Two margins of substitutions market vs. home work work vs. leisure Taxes affect both margins, social subsidies affect the first margin low-skilled women are most affected because the lowest wages and comparative advantage in home production. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

11 Summary of the Paper: Theory Model elements Three market sectors: goods, non-substitutable services, and substitutable services. Four types of labor: male and female with low or high skill. Five time allocations: three market sectors, home work, and leisure. Two margins of substitutions market vs. home work work vs. leisure Taxes affect both margins, social subsidies affect the first margin low-skilled women are most affected because the lowest wages and comparative advantage in home production. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

12 Section 1 Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

13 Quantitative Performance Taxes along over-predict the market hours, especially for women in Nordic countries. Total market hours: 0.27 (model) vs (data) Female low-skilled: 0.34 (model) vs (data) Substitutable service hours: 0.49 (model) vs (data) Considering social subsidies improves the model fit, in particular for Nordic countries, but quantitatively not enough. Total market hours: (model) vs (data) Female low-skilled: (model) vs (data) Substitutable service hours: (model) vs (data) non-targeted data moments gender wage ratio difference: 15% explained relative sector output(consumption) and price: unreported Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

14 Quantitative Performance Taxes along over-predict the market hours, especially for women in Nordic countries. Total market hours: 0.27 (model) vs (data) Female low-skilled: 0.34 (model) vs (data) Substitutable service hours: 0.49 (model) vs (data) Considering social subsidies improves the model fit, in particular for Nordic countries, but quantitatively not enough. Total market hours: (model) vs (data) Female low-skilled: (model) vs (data) Substitutable service hours: (model) vs (data) non-targeted data moments gender wage ratio difference: 15% explained relative sector output(consumption) and price: unreported Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

15 Quantitative Performance Taxes along over-predict the market hours, especially for women in Nordic countries. Total market hours: 0.27 (model) vs (data) Female low-skilled: 0.34 (model) vs (data) Substitutable service hours: 0.49 (model) vs (data) Considering social subsidies improves the model fit, in particular for Nordic countries, but quantitatively not enough. Total market hours: (model) vs (data) Female low-skilled: (model) vs (data) Substitutable service hours: (model) vs (data) non-targeted data moments gender wage ratio difference: 15% explained relative sector output(consumption) and price: unreported Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

16 Other Taxes and Subsidies This paper assumes a constant consumption tax rate across sectors (subsidies to substitutable sectors only), and a constant income tax rate across genders and skills. Different consumption tax rates across sectors. e.g. Government sponsored educational programs. (subsidies to nonsubstitutable consumption) Different income tax rates across genders and skills. e.g. Tax breaks for low-skilled workers. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

17 Other Taxes and Subsidies This paper assumes a constant consumption tax rate across sectors (subsidies to substitutable sectors only), and a constant income tax rate across genders and skills. Different consumption tax rates across sectors. e.g. Government sponsored educational programs. (subsidies to nonsubstitutable consumption) Different income tax rates across genders and skills. e.g. Tax breaks for low-skilled workers. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

18 Other Taxes and Subsidies This paper assumes a constant consumption tax rate across sectors (subsidies to substitutable sectors only), and a constant income tax rate across genders and skills. Different consumption tax rates across sectors. e.g. Government sponsored educational programs. (subsidies to nonsubstitutable consumption) Different income tax rates across genders and skills. e.g. Tax breaks for low-skilled workers. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

19 Labor Demand Variations This paper focus on how taxes affect labor supply of different gender and skill groups. Assume labor demand is the same across countries: US produces identical products using the same input structure as other countries. Labor demand may vary across countries: elasticity of substitution (ρ, η), input shares (λ, ξ), and sectoral productivity (A). Different products Different production technologies Both supply and demand effects may at work. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

20 Labor Demand Variations This paper focus on how taxes affect labor supply of different gender and skill groups. Assume labor demand is the same across countries: US produces identical products using the same input structure as other countries. Labor demand may vary across countries: elasticity of substitution (ρ, η), input shares (λ, ξ), and sectoral productivity (A). Different products Different production technologies Both supply and demand effects may at work. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

21 Labor Demand Variations This paper focus on how taxes affect labor supply of different gender and skill groups. Assume labor demand is the same across countries: US produces identical products using the same input structure as other countries. Labor demand may vary across countries: elasticity of substitution (ρ, η), input shares (λ, ξ), and sectoral productivity (A). Different products Different production technologies Both supply and demand effects may at work. Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

22 Conclusion An examination of the cross-country relationship between taxes and market hours, focusing on the market hours across gender and skill groups. a parsimonious model that generates the observed patterns of crosscountry market hours Questions/: Quantitatively fall short in matching some targets Will considering other taxes and subsidies help? Will labor demand variations help? Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9

23 Conclusion An examination of the cross-country relationship between taxes and market hours, focusing on the market hours across gender and skill groups. a parsimonious model that generates the observed patterns of crosscountry market hours Questions/: Quantitatively fall short in matching some targets Will considering other taxes and subsidies help? Will labor demand variations help? Hao Jin (Xiamen U) Discussion of Taxes and Market Hours June 16th, / 9