Tax as a gender issue James Browne, OECD, Directorate for Employment, Labour and Social Affairs

Summary: why is tax a gender issue? Incidence and incentives Gender wage gap Household structure Different impacts at the individual level Incentives at the family level Different gains from public spending

Gender earnings gaps have fallen, but remain substantial Note: Difference between male and female earnings as a percentage of male earnings. Source: L. Richardson and D. Pacifico (2014), “Gender wage gaps and work incentives”, OECD Report for European Commission.

Progressive tax systems mean gaps in net income are smaller Note: Single person at median male/female earnings. Source: L. Richardson and D. Pacifico (2014), “Gender wage gaps and work incentives”, OECD Report for European Commission.

But work incentives for single women are weaker (retain lower % of earnings) Note: Single person at median male/female earnings. * The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law. Source: L. Richardson and D. Pacifico (2014), “Gender wage gaps and work incentives”, OECD Report for European Commission.

Not just earnings differences matter: lone parents (mostly women) lost most from tax and benefit changes in the UK from 2010–11 to 2014–15 Source: J. Browne (2011), “The impact of tax and benefit reforms by sex: some simple analysis”, IFS Briefing Note 118, http://www.ifs.org.uk/publications/5610.

Summary: why is tax a gender issue? Different impacts at the individual level Incentive for both members of a couple to work Incentive to split paid work more equally Incentives at the family level Different gains from public spending

Participation tax rate for second earner entering work from economic inactivity Note: Couple with two children, 67% of average wage, partner earns average wage. Includes social assistance and housing benefit top ups Source: OECD tax-benefit models.

Progressive individual tax systems create incentive to share paid work more equally Note: Difference in total tax paid if family splits earnings equally rather than one person earning everything. Total earnings 133% of average wage. Source: OECD Family Database.

Summary: why is tax a gender issue? Different impacts at the individual level Incentives at the family level Don’t forget taxes pay for public spending! Amount of tax collected will therefore have different impact on men and women too Different gains from public spending

Thank you! Sources and further reading Closing the gender gap: Act Now, OECD Report www.oecd.org/gender The impact of tax and benefit reforms by sex: some simple analysis, IFS Briefing Note 118 OECD Tax-Benefit Indicators: http://www.oecd.org/social/benefits-and-wages.htm OECD Family Database: http://www.oecd.org/els/family/database.htm Gender wage gaps and work incentives, OECD Report for EC Contact: james.browne@oecd.org Follow us on Twitter: @OECD_Social