Gender norms, work hours, and corrective taxation

This paper deals with optimal income taxation based on a model with households where men and women allocate their time between market work and household production, and where households di¤er depending on which spouse has comparative advantage in market work. The purpose is to analyze the tax policy implications of gender norms represented by a market-work norm for men and household-work norm for women. We also distinguish between a welfarist government that respects all aspects of household preferences, and a paternalist government that disregards the disutility to households of deviating from the norms. The results show how the welfarist government may use tax policy to internalize the externalities caused by these norms, and how the paternalist government may use tax policy to make the households behave as if the norms were absent. Keywords: Social norms, household production, optimal taxation, paternalism. JEL classi…cation: D03, D13, D62, D60, H21. Research grants from the Bank of Sweden Tercentenary Foundation, the Swedish Council for Working Life and Social Research, and the Swedish Tax Agency are gratefully acknowledged.