@article{4eca267136d2403aa1ae26976e59a4b0,
title = "Singles, couples, time-averaging, and taxation",
abstract = "We study consequences of tax reforms in an incomplete markets overlapping generations model in which male and female workers with different ability levels self-insure by acquiring a risk-free bond, “time-averaging” their life-cycle work schedules and career lengths, and possibly by marrying and divorcing. We study incidences of a flat-rate tax and in combination with stylized versions of a negative income tax (NIT) or an earned income tax credit (EITC). Tax reforms have diverse effects that differ by workers{\textquoteright} abilities, marital statuses, and ages. A new “ex post-ex ante” criterion helps us to sort through welfare incidences. The importance of labor supply responses at the extensive margin makes the EITC better for redistribution than the NIT.",
keywords = "EITC, Flat-rate tax, Heterogeneous households, Labor supply, Negative income tax, Precautionary saving, Social security, Time-averaging",
author = "Holter, {Hans A.} and Lars Ljungqvist and Sargent, {Thomas J.} and Serhiy Stepanchuk",
note = "Funding Information: We thank a referee, Mariacristina De Nardi, Richard Blundell, and Eric French for insightful and constructive criticisms. Hans A. Holter is grateful for support from the Research Council of Norway , grant numbers: 283314 , 302661 (IMWEL) , 267428 (OFS) , and 341250 (NFS) . Holter also thanks the Portuguese Science and Technology Foundation (FCT), CEECIND/01695/2018, PTDC/EGE-ECO/7620/2020, 2022.07354.PTDC, UIDB/00124/2020 and Social Sciences DataLab, PINFRA/22209/2016 . Holter and Stepanchuk are thankful for the use of the Norwegian HPC infrastructure, Sigma2, project number: NN9487K. Ljungqvist gratefully acknowledges research support from the Jan Wallander and Tom Hedelius Foundation . Publisher Copyright: {\textcopyright} 2024 Elsevier B.V. All rights are reserved, including those for text and data mining, AI training, and similar technologies.",
year = "2025",
month = mar,
doi = "10.1016/j.jmoneco.2024.103702",
language = "English",
volume = "150",
journal = "Journal of Monetary Economics",
issn = "0304-3932",
publisher = "Elsevier Science B.V., Amsterdam.",
}