Tax Policy and Gender Inequality: Assessing the gendered effects of Argentina's 2013 personal income tax reform

Despite significant progress in gender equality, gender gaps in wages and labour supply persist globally, driven by occupational segregation, caregiving responsibilities, and systemic discrimination (Budig & England, 2001; Dorius & Firebaugh 2010; Blau & Kahn, 2017; Castellano & Roca, 2020). Tax policies have recently emerged as a potential tool to address these disparities, with progressive systems shown to reduce income inequality (Bargain et al., 2019; Christofides et al., 2013; Olivetti & Petrongolo, 2017) and women’s labour supply considered more responsive to tax reforms (Borjas, 2005; Evers et al., 2008, Eissa et al., 2008; Keane, 2011; Meghir & Phillips; 2010). This thesis examines the gendered effects of Argentina’s 2013 Personal Income Tax (PIT) reform, which introduced significant tax relief for workers earning below AR$15.000 (approximately USD 3.000) monthly. While the reform aimed to alleviate the tax burden on middle-income workers, its impacts on wage inequality and...Show moreDespite significant progress in gender equality, gender gaps in wages and labour supply persist globally, driven by occupational segregation, caregiving responsibilities, and systemic discrimination (Budig & England, 2001; Dorius & Firebaugh 2010; Blau & Kahn, 2017; Castellano & Roca, 2020). Tax policies have recently emerged as a potential tool to address these disparities, with progressive systems shown to reduce income inequality (Bargain et al., 2019; Christofides et al., 2013; Olivetti & Petrongolo, 2017) and women’s labour supply considered more responsive to tax reforms (Borjas, 2005; Evers et al., 2008, Eissa et al., 2008; Keane, 2011; Meghir & Phillips; 2010). This thesis examines the gendered effects of Argentina’s 2013 Personal Income Tax (PIT) reform, which introduced significant tax relief for workers earning below AR$15.000 (approximately USD 3.000) monthly. While the reform aimed to alleviate the tax burden on middle-income workers, its impacts on wage inequality and labour supply, particularly for women, remain underexplored. Using data from Argentina’s Longitudinal Sample of Registered Employment (MLER) and a regression discontinuity design (RDD), this study investigates the reform’s effects on two dimensions: (i) gendered impacts on net earnings and (ii) labour supply adjustments at the intensive margin. The results reveal that the tax reform had a mechanical impact on workers' net earnings, with a small but significant local effect. However, there were no significant gender differences in the reform’s impact on the tax burden or labour supply. While the results do not demonstrate significant gendered effects, the study's limitations—particularly the absence of detailed data on family composition, caregiving responsibilities, and work effort—preclude definitive conclusions. These limitations highlight the importance of richer datasets and more nuanced methodologies to fully understand how income taxes influence labor market dynamics for men and women.Show less

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Tax Policy and Gender Inequality: Assessing the gendered effects of Argentina's 2013 personal income tax reform