Gendered Effects of the Personal Income Tax: Evidence from a Schedular System with Individual Filing in a Developing Country

Produced by: 
Universidad de la República - Uruguay
Available from: 
February 2017
Paper author(s): 
Marisa Bucheli
Cecilia Olivieri
Fiscal Policy - Public and Welfare Economics

This article analyzes the gender differences in the Personal Income Tax (PIT)-to-income ratio in Uruguay. Although the tax code does not explicitly specify gender differences, the tax burden varies among households types. When analyzing these differences, our findings suggest that the PIT serves as somewhat of an incentive towards equal gender time allocation within the family, which is consistent with gender equity. In turn, this pattern is reinforced by non-desirable aspects such as higher levels of informality among women and a higher level of non-taxable sources of income among single female households. The above conclusion relies on the assumption of individual filing. Our analysis also observes that the strengths of the PIT system from the gender perspective are eroded by the possibility to opt for a (rarely used) joint filing. The empirical strategy was assessed through the estimation of a zero-one inflated beta model (ZOIB). This model properly addresses the fact that the PIT-to-income ratio includes many zero data points.


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