Budget measures introduced since 2000 have helped to increase the number of married women in employment, with full individual taxation likely to further reduce gender disparities in the labour market.
The research paper, published by the Economic and Social Research Institute (ESRI), indicates that any efforts to improve female participation in the jobs market, such as tax reform, should be accompanied by other initiatives that facilitate those who want to combine family and professional life.
Ireland’s female employment rate is 64%, which is middle tier in European terms, behind the likes of Sweden but ahead of countries such as Greece and Italy.
According to the research, entitled ‘Taxation, work and gender equality in Ireland’: “Although the gender pay gap has been improving, men still earn approximately one sixth more than women in Ireland.”
The general trend in the EU has been a move from joint taxation to individual taxation. Author Dr Karina Doorley outlines how Ireland ended up with a “somewhat hybrid system”, thanks to opposition to proposals in 2000 to phase in individual income taxation for couples based on the view that it penalised women who chose to stay at home.
The current system has been in place since 2002 and, according to the research: “The employment probability of married women increased by six percentage points after the reform.
This reflects the fact that, while the employment rate of married men and of single women was stable over the reform period, the employment rate of married women increased steeply around the reform period.
“Married women are found to have increased their hours of work by around two per week after the reform.”
Another effect was that the hours of unpaid childcare performed by married women fell, by around three per week, after the reform.
Dr Doorley said: “This magnitude is comparable to the estimated increase in hours of work by married women.”
According to the research paper: “A shift from this hybrid system to full individual taxation, which would equalise the marginal tax rates of the primary and secondary earner, is a potential policy route to take from the perspective of increasing female labour supply and reducing gender disparities in the burden of household production in Ireland.”
It says it could also lead to “broader societal benefits.”
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