Population ageing, taxation, pensions and health costs, CHERE Working Paper 2007/10

much closer - 64, 63, 66 and 72 per cent for Australia, the UK, US and Sweden,
respectively. However, female participation rates bear only a weak relationship to
hours worked. While almost all married men of prime working age in these countries
work full time until close to retirement, there is wide variation in full time female
rates of employment. Australia has the lowest full time female rate across these
countries and, as a result, the largest gender gap in market hours of work.

This section first of all presents evidence on gender differences in lifecycle labour
supply behaviour drawing on data for all couple income unit records in the ABS IHS
2003-04. The sample contains 6953 records. The section then goes on to show that
there is a strong positive relationship between female labour supply and household
saving, purchase of private health insurance, and private health costs, using data for
couple income units drawn from the ABS 2003-04 Household Expenditure Survey
(HES) (2003-04)²¹. This second sample contains 4228 records.

Female labour supply is strongly associated with the presence of children and
therefore simultaneously with the tax treatment of married mothers as second earners.
To capture the combined effects of both, we present lifecycle profiles of labour supply
across six phases broadly defined as follows²²

Figure 3 plots the weighted data means of male and female hours in each phase. The
data show a dramatic fall, on average, in female market hours after the first child. In
phase 1 there is only a small gap, reflecting the fact that both partners tend to work
full time before the arrival of children. In phase 2 female labour supply falls to
around a third of

²¹ Second edition.

²² There are 782, 945, 1041, 1072, 1551, and 1562 records in phases 1 to 6, respectively.

²³ This phase includes all couples in which the female partner is aged under 40 years and there are no
children present in the household.

12

<<   13   14   15   16   17   18   19   >>

More intriguing information