Income taxes and the marriage decision

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Abstract
Economic incentives have been found to play an important role in the marriage decision in developed and developing countries. However, the way in which the income tax treatment of the family affects these incentives has been routinely ignored. This paper uses time-series data for the United States from 1947 to 1988 to estimate the impact of economic factors - including, for the first time, the tax consequences of marriage - on the aggregate marriage rate. The estimation results indicate that economic factors like income, female wages and education play an important and statistically significant role in the marriage decision. In particular, the tax consequences of marriage clearly affect the marriage decision: when income taxes increase with marriage, the aggregate marriage rate declines. However, the magnitude of this impact is quite small. This result suggests that some individuals respond to tax incentives in their marriage choices, but that for many individuals taxes do not affect these decisions.

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