Fiscal policy and gender income inequality: The role of taxes and social spending

Abstract

Fiscal policies may affect gender inequalities in income and opportunity. This report reviews the evidence on the impact of tax and spending policies on gender income gaps across countries, as well as on work incentives and labour market outcomes for women. The focus is on the role of tax (and social security contributions) and transfers in cash and some transfers in-kind (in the form of education and health services). Given their relevance for women’s outcomes after having children, we also survey the evidence on the impact of childcare subsidies (both demand and supply) and paid parental leave.

Full text

Fiscal policy and
gender income inequality
The role of taxes and social spending
Laura Abramovsky and Irene Selwaness
June 2023
Report

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How to cite: Abramovsky, L. and Selwaness, I. (2023) Fiscal policy and gender income inequality:
the role of taxes and spending. ODI Working Paper. London: ODI (www.odi.org/en/publications/
fiscal-policy-and-gender-income-inequality-the-role-of-taxes-and-spending)
Photo: Marco Verch/Flickr

Acknowledgements
This report benefited from internal and external review. In particular, the authors would like
to thank Francesca Bastagli, Hazel Granger and Mark Miller for their guidance and suggestions
throughout the research and for comments on the draft. Martin Evans, Susan Harkness,
Kyle McNabb and Jukka Pirttilä provided valuable insights and suggestions on the draft. The
publication was edited by Matthew Foley and production was coordinated by Gruffudd Owen.
Opinions and any errors or omissions remain the responsibility of the authors.
About this publication
This report is based on research funded by (or in part by) the Bill & Melinda Gates Foundation.
The findings and conclusions contained within are those of the authors and do not necessarily
reflect positions or policies of the Bill & Melinda Gates Foundation. The work has been produced
under the ODI Development and Public Finance (DPF) programme in collaboration with the
Equity and Social Policy (ESP) programme. The DPF programme of research and advisory work
focuses on how governing bodies can best support prosperous and fairer societies. The ESP
programme leads research, analysis and informed policy debate on poverty, inequality and the
role of social policy.
About the authors
Laura Abramovsky is an empirical microeconomist. She is a freelance researcher and consultant,
a Research Associate for the ODI DPF programme, and a Research Associate at the Institute for
Fiscal Studies. Her work currently focuses on tax and social protection, and the water, sanitation
and hygiene (WASH) sector in lower- and middle-income countries.
Irene Selwaness is Associate Professor at the Faculty of Economics and Political Science,
Cairo University, Egypt, and a Research Fellow at the Economic Research Forum (ERF). She has
previously been a Research Fellow in the ESP programme at ODI.

Contents
Acknowledgements / i
Display items / iii
Acronyms / iv
Executive summary / 1
1 Introduction / 3
1.1 Background and motivation / 3
1.2 Objectives / 5
2 Analytical framework / 7
2.1 Gender inequalities in income and employment / 7
2.2 How does fiscal policy affect gender income equality? / 10
2.3 Outcomes, measurement and the evidence base / 14
2.4 Policy challenges and opportunities / 16
3 The impact of fiscal policy on gender income inequality / 19
3.1 Combined tax and spending / 19
3.2 Individual instruments / 21
4 Emerging policy lessons and conclusions / 35
References / 39

Display items
Figures
Figure 1 Female labour income shares, 1990–2020 / 4
Figure 2 Regional trends in earnings and employment ratios, 1990–2020 / 7
Figure 3 Regional gender gaps in unpaid care work / 9

Acronyms
CIT corporate income tax
EU European Union
FLFP female labour force participation
GDP gross domestic product
HICs high-income countries
IMF International Monetary Fund
LICs lower-income countries
LMICs lower-middle income countries
MENA Middle East and North Africa
OECD Organisation for Economic Co-operation and Development
PFM public financial management
PIT personal income tax
PP percentage point
SDG Sustainable Development Goal
SSA sub-Saharan Africa
UMICs upper-middle income countries
UN United Nations
VAT value added tax

Executive summary
Persistent inequalities between women and men
in income, unpaid work, paid work and other
dimensions disadvantage women, undermine
human rights and damage economic prosperity.
Despite the challenges in measuring economic
resources at the individual level in a consistent
manner across countries, estimates suggest that
women are often more likely to be poorer, to live
in poorer households or to earn less than men.
Systemic differences in unpaid and paid work
and earned and unearned income are linked and
substantial across countries and regions.
Fiscal policies may affect gender inequalities in
income and opportunity. This report reviews
the evidence on the impact of tax and spending
policies on gender income gaps across countries,
as well as on work incentives and labour market
outcomes for women. The focus is on the role
of tax (and social security contributions) and
transfers in cash and some transfers in-kind
(in the form of education and health services).
Given their relevance for women’s outcomes after
having children, we also survey the evidence on
the impact of childcare subsidies (both demand
and supply) and paid parental leave.
The report concentrates on the impact of fiscal
policy on income gaps between genders through
redistributing via the tax and benefit system across
and within households; and through changing the
economic returns to female (formal) employment
through tax, transfers and other policies that
reduce women’s unpaid work burden and hence
the opportunity cost of doing paid work.
The evidence on the impact of tax and social
spending on income gaps between men and
women is limited across countries, though
especially from non-high-income countries
(HICs). This is partly due to data and conceptual
challenges, and partly for political reasons. More
effort is needed to fill these gaps.
Evidence from (mostly European) HICs shows
that, in general, the combined impact of (mostly
progressive) systems of direct taxes and cash
transfers (contributory and non-contributory) can
reduce income inequality between genders.
Evidence suggests that (formal) work
disincentives created by the system of direct tax
and cash transfers are larger for women than for
men, particularly women with a male partner and
children.
There are important emerging lessons and
implications for the design of each policy tool,
even if studies are still few. Policies that focus
on narrowing gender gaps in education, health
and infrastructure can be particularly effective
in alleviating income inequality and changing
employment outcomes in lower-income countries
(LICs). Improving the progressivity of the tax-
benefit system and addressing disincentives to
work for second earners, subsidising child/elderly
care, mandating and subsidising paid parental
leave and flexible work arrangements can be
impactful across countries.
When looking at the impact of fiscal policies on
gender income gaps, it is important to consider
the system as a whole, and how to best target
the most vulnerable including lower-income
women. Measures such as introducing or
broadening the base for value-added tax (VAT)
or removing inefficient fuel subsidies can widen
gender disparities or disadvantage lower-income

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households and individuals. In those instances,
as is the case when considering inequalities
across the income distribution, it is important
to assess the cost-benefit of alternative reform
packages that recycle revenue from tax reforms to
mitigate negative impacts on the most vulnerable
sections of the population. It is essential to
consider policies that can mitigate the undesired
effects, for example targeted cash transfers and
investment in education and health.
Although the focus here is on the role of fiscal
policy in gender income inequality, it is important
to position this discussion within the wider context
of inequality across genders. Social and cultural
norms and the type of jobs available matter for
both women and men. Societies need to consider
a multipronged approach that goes beyond tax
and social spending in cash transfers, childcare,
parental leave, education and health if they want to
change gender differences in work or income.

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1 Introduction
1 Universal Declaration of Human Rights, adopted by the UN General Assembly on 10 December 1948.
2 United Nations (UN) Sustainable Development Goal 5 ‘Achieve gender equality and empower all women and
girls’ and associated progress (www.un.org/sustainabledevelopment/gender-equality) and the UN statement of
why gender equality is important (www.un.org/sustainabledevelopment/gender-equality).
3 Hsieh et al. (2019) estimate that between 20% and 40% of growth in aggregate market output per person
between 1960 and 2010 in the United States (US) can be attributed to the observed convergence in distributional
occupation between white men and women and black men consistent with a better allocation of talent. Kochhar
et al. (2016) estimate large losses in gross domestic product (GDP) due to gender inequalities in the labour
market, around 15% of GDP in Member States of the Organisation for Economic Co-operation and Development
(OECD) and 18% in a sample of non-OECD emerging economies. Ostry et al. (2018) suggest that men and women
complement each other at work, bringing different perspectives and skills. They estimate that making women
as likely as men to participate in the labour market could add 35% to GDP on average in countries where this
difference is largest (Dabla-Norris and Kochhar, 2019). Wodon et al. (2020) estimate the gain in human capital
wealth due to gender inequality in lifetime earnings to be around 22% globally.
4 The eight indicators used by World Bank (2023) to measure legal differences between men and women at
different life stages are: Mobility, Workplace, Pay, Marriage, Parenthood, Entrepreneurship, Assets and Pensions.
1.1 Background and motivation
Gender equality and women’s empowerment
are widely considered a human right, key to
attaining social fairness and embedded in
international human rights law.1 In 1995, in
the Beijing Declaration and Platform for Action,
representatives of 189 countries committed to
‘advance goals of equality development and peace
for all women everywhere in the interest of all
humanity’ (UN, 1995). Inspired by this, Sustainable
Development Goal (SDG) 5 aims to ‘Achieve
gender equality and empower all women and girls’,
including equal legal treatment and access to
opportunities and economic resources.2
Achieving gender equality, including in education,
health and labour force participation, has been
identified as a key factor in fostering economic
growth. Various studies have pointed to significant
macroeconomic gains from reducing gender
inequality (Hsieh et al., 2019; Kochhar et al., 2016;
Ostry et al., 2018; Wodon et al., 2020). Increasing
human capital, gender diversity and a better
allocation of talent across sectors result in higher
productivity, better management practices,
economic diversification and growth.3
However, numerous countries maintain legal
barriers to women’s full economic participation
and gender income gaps remain wide. According
to the World Bank (2023), 2.4 billion working-age
women do not have access to the same legal
rights as men, and only 14 countries (all HICs) have
achieved legal gender parity. This results in, for
example, disadvantages in terms of freedom of
movement and ability to work and a higher risk
of sexual harassment in the workplace.4 Figure 1
shows that, in the last three decades, significantly
less than 50% of labour income accrued to women,
although there was some catch-up between 1990
and 2020 (Chancel et al., 2022). There is significant
variation across regions. Inequality is highest in Asia
and in the Middle East and North Africa (MENA). In
the MENA region and in sub-Saharan Africa (SSA),
women face the greatest legal barriers (World
Bank, 2023). Section 2.1 provides further evidence
on income and employment gaps.

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Figure 1 Female labour income shares, 1990–2020
Source: Reproduced from Chancel et al. (2022), Figure 5.2
5 For the US, see Creamer et al. (2022). For the EU, see Eurostat (2023). In the EU, a person at risk of poverty
or social exclusion (AROPE) corresponds to the sum of persons who are either at risk of poverty, severely
materially and socially deprived or living in a household with a very low work intensity. For OECD, see OECD
(2019; chapter 6).
6 Using the international poverty line, the paper finds that 122 women between the ages of 25 and 34 live in poor
households for every 100 men of the same group. The authors estimate that poverty rates are similar across
genders globally. However, these are calculated using equal resource sharing among household members, which
is a substantial limitation given intrahousehold inequalities.
Women are more likely to be poorer, to live
in poorer households or to earn less than
men. Estimates from 2021 show that 12.6% of
women and 10.5% of men in the US live in poverty;
women in European Union (EU) countries are
at higher risk of poverty or social exclusion than
men (22.7% compared to 20.7%); and relative
poverty among women is higher than among
men in OECD countries on average (12.3% against
10.9%).5 At ages 15–19, differences in poverty
rates are biased against women except in SSA
(Azcona et al., 2021). Muñoz Boudet et al. (2018),
using data from 89 countries, estimate that girls
and women of reproductive age are more likely to
live in poor households than boys and men.6 The
UN estimated that more women would be living
in extreme poverty than men by the end of 2022
(UN, 2022).
Awareness of the importance of understanding
the gendered impact of fiscal policy has increased.
Gender, like other social stratifications such as
race, disability and income, plays an important
role in mediating the impact of taxation and
social spending on incomes and well-being more
generally. Several countries began to mainstream
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Asia
(excl. China)
China Russia &
Central Asia
Latin
America
MENA North
America
SSA Western
Europe
1990 1995 2000 2010 2015–20202005
Gender parity

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gender into fiscal policy design, implementation
and analysis (so-called gender budgeting)
some decades ago, and these efforts have been
encouraged by many international organisations
(UN, International Monetary Fund (IMF),
World Bank, OECD, G7, EU, among others).7 In
addition, there has been increasing interest in
understanding whether it is desirable and practical
to design specific aspects of tax and spending
policies to rectify biases against women (Alonso-
Albarran et al., 2021; ATAF, 2022; Lahey, 2018).
However, partly due to theoretical and empirical
challenges as well as political ones, there is limited
evidence and discussion on the gendered impact
of fiscal policies.
1.2 Objectives
This report reviews the (limited) evidence
on the impact of tax and spending policies
on gender income gaps across countries, as
well as on work incentives and gaps in labour
market outcomes for women. The focus is on
the role of tax (and social security contributions)
and transfers in cash and in-kind (in the form
of education and health services). Additionally,
given their relevance for women after having
children, we survey the evidence on the impact of
childcare subsidies (both to demand and supply)
and paid parental leave. The report concentrates
on the impact of fiscal policy on income gaps
between genders through redistributing via
the tax and benefit system across and within
households, and by changing the economic
returns to female (formal) employment through
tax, transfers and other policies that lower
women’s unpaid work burden and hence the
opportunity cost of doing paid work.
7 See IMF (2022) for a detailed discussion of IMF strategy towards mainstreaming gender; World Bank (2007)
and (2015) for an update on their Gender Action Plan; UN Women (2021) on gender equality today for a
sustainable tomorrow; and the Gunnarsson et al. (2017) study on gender equality and taxation in the EU.
The report assesses whether and to what
extent fiscal policy can be used as a tool to
reduce gender income gaps and how these
may vary across country contexts. Combining
analysis of the limited evidence on the impact of
tax and transfers on gender income gaps and using
economic principles, emerging policy lessons
are drawn. The positive relationship between
income inequality and gender income inequality
has important implications for policy. Some of
the features of fiscal systems that reduce income
inequality, such as targeted cash transfers, may
also reduce gender income gaps, and vice versa.
As such, this report builds on Granger et al.
(2022), who look at fiscal policy and its impact on
vertical income inequality, and should be seen as a
companion piece.
Substantial data challenges and evidence gaps
are highlighted. Revisiting the literature, it is
clear that major evidence gaps persist. One of the
most significant data challenges is that we do not
know who consumes after-tax incomes. Data gaps
are more substantive in lower-income contexts
where traditional income and consumption
surveys are not systematically available, and their
frequency is lower. Hence, efforts to improve data
collection and analysis of the impact of tax and
social spending policies on gender income and
employment should be prioritised.
Although the focus is on the role of fiscal policy
in gender income inequality, it is important
to position this discussion within the wider
context of inequality across genders and its
drivers, and acknowledge the limitations of
fiscal policy. First, there are dimensions beyond
income that matter for economic and well-being

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inequalities across gender. Second, gender income
inequalities are shaped by complex political, social
and economic phenomena beyond tax and social
spending, including social norms and legal rights.
The analysis is structured as follows:
• Section 2 outlines the analytical framework.
• Section 3 examines the evidence on the impact
of fiscal policy on gender income gaps and
labour market outcomes.
• Section 4 discusses emerging policy lessons and
offers some concluding remarks.

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2 Analytical framework
8 This is often referred to as job segregation across occupations or industries. For example, men dominate
roles such as drivers and mobile plant operators, plumbers and IT professionals. Women are more likely to be
personal care workers, health associate professionals and cleaners and helpers (ILO, 2020).
2.1 Gender inequalities in income and
employment
This report focuses on within-country gender
gaps in income and labour market outcomes.
The latter are a primary driver of gendered
income inequality through both the extensive
margin (fewer women work) and the intensive
margin (the hours women work) and the
male-female wage difference. It is important
to consider gender inequalities in earned income
and employment since they are relevant to
understanding how fiscal policy can affect gender
income gaps. Figure 2 shows that, in the MENA
region, on average women earned 61% of what
men earned in 2020, while the ratio of employed
women to employed men was only 29% (Chancel
et al., 2022). Differences in earnings are driven by
differences in hours worked, type of job8 and pay
per hour, as well as within-job inequalities (Andrew
et al., 2021; Goldin, 2014; Lo Bue et al., 2022;
Penner et al., 2023).
Figure 2 Regional trends in earnings and employment ratios, 1990–2020
Source: Reproduced from Chancel et al. (2022), Figure 5.4
1990 1995 2000 2010 2015–20202005
1990 1995 2000 2010 2015–20202005
Gender parity
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
MENA Asia (excl.
China)
SSA Latin
America
Western
Europe
North
America
China Russia &
Central Asia
Earnings ratio
Employment ratio

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At a point in time, female labour force
participation (FLFP) tends to fall with a
country’s level of income and then rise again.
However, there is variation across countries
of similar income levels and higher FLFP
does not guarantee closing gender income
gaps (Goldin, 1995; Verick, 2014). The observed
pattern is associated with economic structure,
social norms affecting labour supply and demand,
female access to education, and health and fertility
rates. The latest data available from the World
Bank shows that the FLFP gap is highest in lower-
middle income countries (LMICs), followed by
upper-middle income countries (UMICs), and
lastly LICs and HICs. However, there are outliers.9
In South Asia and in the MENA region, FLFP rates
are relatively low. Evans (2022a and 2022b) argues
that this is due to patrilineal kinship promoting
female seclusion combined with low economic
returns to female employment. Klasen (2019)
explores the drivers of uneven FLFP across
developing countries.
Women in LICs work out of necessity in home-
production or subsistence agriculture and as
a response to a shock, which may explain why
FLFP rates are higher. Obstacles to education
and healthcare remain a large barrier to labour
market outcomes in these countries. Women are
more likely to be in vulnerable employment – own-
account workers and contributing family workers,
following the International Labour Organization
9 The World Bank Gender Data Portal (https://genderdata.worldbank.org/topics/employment-and-time-use)
shows that levels of labour force participation for men-to-women by income group in 2022 were estimated to
be: 73.7% to 35.4% in LMICs; 72.7% to 56.3% in UMICs; 74.8% to 62% in LICs; and 68% to 54% in HICs.
10 According to ILO (2018), ‘persons in vulnerable employment (own-account workers and contributing family
workers) are more prone to have informal work arrangements and less likely to have social security coverage
and to benefit from social dialogue’.
11 Section 3 of Gardner et al. (2022) expands on the definition of informal jobs and how it overlaps with the
definition of vulnerable jobs. Section 3.1 states that ‘The criteria to determine if employers and own-account
workers are covered by formal arrangements (registration of their business or recordkeeping for taxation
purposes) differ from the criteria used to classify employees as informal versus formal (employer contributions
to social security, access to paid annual leave and access to paid leave).’
(ILO) definition – than men (Lo Bue et al., 2022).10
According to Gardner et al. (2022), conditional on
being employed, in Africa women are more likely
than men to have an informal job (90% vs 83%); in
LICs the figure is 92% vs 88%.11
In LMICs and UMICs, the returns of second
earners (usually women) decline as countries
industrialise and paid jobs move further away
from home, making it more difficult to juggle
household chores and responsibilities with
a paid job in the market. As the tertiary sector
expands, education and health access grows and
fertility rates decline. FLFP increases particularly in
the service sector.
Gendered differences in labour market
outcomes and unpaid care work are two sides
of the same coin. Figure 3 shows that women
bear the greatest burden of unpaid work across
regions, with the gap being highest in the MENA
region. This is also inversely related to country
income levels (ILO, 2018). Long-standing social
norms have meant that women do a higher
share of unpaid work and hence have less time
for education (particularly beyond primary) and
paid work in the labour market. This undermines
women’s employment prospects and career
progression, and hence their achieving equal pay
(Andrew et al., 2021; Gimenez-Nadal and Molina,
2022; Sullivan, 2019). Furthermore, in HICs, where
women have similar or higher levels of education

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and access to health services than men and the
employment gap has narrowed significantly, on
average women still work fewer hours and earn
less per hour and overall, with the gap appearing
often after having children (Bertrand et al., 2010;
Kleven et al., 2019 and 2021).
Figure 3 Regional gender gaps in unpaid care work
Note: Unpaid work includes care and domestic work. Unweighted averages across countries with available data.
Source: Dataset: Gender, Institutions and Development Database (GID-DB) 2023
Even women in employment shoulder a higher
share of unpaid work, a gap exacerbated during
Covid-19, particularly for mothers (OECD,
2021a). Taking paid and unpaid work together,
overall women on average work more hours than
men across regions and country income groups
(ILO, 2018: Figure 2). Acknowledgement that
unpaid care work, largely carried out by women,
contributes to the provision of goods and services
and fosters human capital development has led
to efforts to measure the contribution of unpaid
work to GDP. ILO (2018) estimates that women
perform 76.2% of all unpaid care work, over three
times more than men; when valuing unpaid care
work at minimum wage per hour, it can represent
around 10% of global GDP.
Gender inequalities in other sources of
income and in wealth remain high. It is more
difficult to measure individual-level capital
income and assets partly due to conceptual
issues (many assets are jointly owned) and lack
of information more generally. Nonetheless,
estimates from different sources suggest that
gender gaps in capital income, property and
land ownership and more general measures of
0
1
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6
0
1
2
3
4
5
6
East Asia &
Pacific
Europe &
Central Asia
Latin America
& Caribbean
MENA North
America
South
Asia
SSA
Men’s hours of unpaid work Women’s hours of unpaid work Female to male ratio
Ratio
Hours per day

10 ODI Report
wealth may be even higher than gaps in earned
income (Coehlo et al., 2022). Women are under-
represented in the top part of the capital income
distribution (ibid.). In LICs and LMICs, women
represent a smaller share of landowners than
men (FAO, 2018) and are less likely to own a
home (IFC, 2019).12 In terms of wealth, in the US,
among singles (households with a single adult,
unmarried, divorced or widowed) women’s
average wealth holdings were 82% of men’s in
2019 (Chang et al., 2021); in Europe, there is a
large gender gap at the top of the distribution
(Schneebaum et al., 2018); and globally, women
are a small minority among the richest individuals
(Credit Suisse, 2019).13 Atkinson et al. (2018)
look at the gender divide at the top of the total
income distribution. Using tax record data for
eight countries with individual taxation, they find
that women are significantly under-represented,
accounting for less than a third of taxpayers in
the top 10% of the income distribution.
Gender income inequality is associated
with income inequality, i.e. how income is
distributed across households or individuals
classified by income levels, in various ways.
Measures that capture income inequality between
households often assume that all members get
an equal (or equivalised) share of resources,
according to need. However, this assumption
has been increasingly challenged by a body of
empirical literature (Chiappori and Meguir, 2014).
To the extent that resources are not equally
shared across genders within a household, the
traditional measures of income inequality will tend
to be downward biased (Bargain, 2022). Gender
gaps in employment outcomes are likely to lead to
12 The World Bank Gender Data Portal (https://genderdata.worldbank.org /topics/assets) shows that men are more
likely to own land and property in several non-HICs, based on Demographic and Health Surveys.
13 Coehlo et al. (2022) discuss various studies exploring the mechanisms mediating inequalities in asset holdings.
gender income gaps and higher income inequality.
Cross-country evidence shows that both are
positively associated (Kochhar et al., 2016).
In addition to inequalities in income (and
consumption) and labour outcomes, other
dimensions also matter for economic and
well-being inequalities across gender.
These include capabilities, livelihoods and
individual agency (Bastagli et al., 2016). However,
these are not the focus of this review.
2.2 How does fiscal policy affect
gender income equality?
Few countries’ laws governing tax and social
spending systems differentiate directly
based on gender. However, even systems
that do not discriminate explicitly can affect
women’s income relative to men due to
existing differences in work, earning, income
and consumption. Gendered differences in
work patterns at the extensive and intensive
margins, in the type of occupation and sector, in
earned income and in the informality of labour
result in total pre-fiscal (taxable) income gaps
across genders, with implications for direct tax
liabilities. Gendered differences in the level and
composition of consumption goods and services
affect how the burden of indirect taxes and
subsidies is distributed between men and women.
Moreover, gender differences in social security
contributions and work histories, as well as in
access to education and health services, have
implications for who benefits from contributory
and non-contributory cash and in-kind transfers
and spending. This means that tax and transfers

11 ODI Report
will impact gender income gaps in an implicit way,
even if there is no explicit discrimination in law
against women.14
Many countries have eliminated explicit bias
against women in their laws and regulations
governing tax policies, although exceptions
remain, particularly in LICs and regions such
as MENA and Asia regarding direct income
taxation. Explicit bias is more common in direct
taxes, rather than sales-based taxes (indirect
taxes) since the former are individual-based.
Countries including France, Ireland, Malaysia, the
Netherlands and South Africa removed gender
bias from personal income tax (PIT) in the 1980s
and 1990s (Stotsky, 1997). Among the 16 countries
surveyed by ATAF (2022), only Morocco still allows
explicit discrimination against women by defining
them as dependent of men, who are considered
the head of the household and by default
benefit from tax exemptions and allowances
encompassed in PITs. For households that are
female-led, the woman must provide evidence that
her husband is her dependent in order to benefit
from the same allowances.15
Some countries have introduced features in
the design and implementation of their tax and
social spending systems to actively benefit
women. For example, conditional cash transfer
programmes are often targeted to women, often
the main carer of children – with the aim of
alleviating poverty among women and children
14 In her seminal work on gender bias in tax systems, Stotsky (1996, 1997) coined the term implicit gender bias in
tax systems in the context of gender income gaps. This bias arises due to differences in consumption, income
and employment outcomes, rather than through explicit gender differentiation in the law governing tax and
spending – what Stotsky referred to as explicit gender bias in tax systems.
15 The countries surveyed are Angola, Cameroon, Côte d’Ivoire, Egypt, Ghana, Kenya, Morocco, Mozambique,
Nigeria, Uganda, Sierra Leone, Seychelles, South Africa, Tanzania, and Zambia. See ATAF (2022) for a
more detailed discussion of this case and other historical cases worldwide that have now been eliminated.
Gunnarsson et al. (2017) discuss this issue in relation to European countries, concluding that explicit biases
against women in tax policy have been eliminated.
and improving outcomes for children (discussed
in more detail in Section 3.2.2). Many countries
have reduced VAT rates to below the standard rate
or even to zero for sanitary products exclusively
consumed by women (see Section 3.2.3).
The size, composition and quality of tax
revenues and spending matter for gender
income equality. Social preferences over the
role of the state, its size in terms of revenue and
spending, and how this revenue is raised and spent
can affect who pays taxes and who benefits from
transfers and other social spending. Governments
with low tax-to-GDP revenues raised mainly
through general sales taxes, often the case in LICs,
are frequently associated with less progressive tax
systems and lower spending on public services and
transfers (Granger et al., 2022). This affects gender
income gaps in many ways. To the extent that
women are over-represented among the poor, a
smaller PIT base and lower spending in means-
tested cash transfers will likely affect women
more than men. Access to quality public health
and education services remains more restricted
for women than men in many LICs (Wodon et
al., 2020). The provision of other quality public
services, such as water and sanitation and care
services for the elderly and children, has also been
identified as critical for gender equality (IMF, 2022;
Kochhar et al., 2016; Wodon et al., 2020), since, as
previously discussed, women shoulder a higher
burden of unpaid care and household work.

12 ODI Report
Tax and transfers can also affect gender
income gaps in the future through affecting
employment outcomes and access to
education and health today. Direct taxes
(their progressivity, the unit of taxation and
the definition of the tax base, including child
allowances or credits) and transfers tend to
affect family and labour supply decisions in
an interrelated fashion, determining whether
disposable income is sufficient to cover the
fixed costs of entering employment (extensive
margin), and conditional on employment and
how many hours to work (intensive margin) of
the second earner, usually women. To the extent
that spending on education and health benefits
women, investment in their human capital will
likely affect job opportunities in the future.
Most countries have individual-based PIT with
some elements that are family-based, such as
tax reliefs or cash transfers designed in complex
ways to trade-off equality and work incentives
objectives (Christl et al., 2021; Coehlo et al.,
2022; Deloitte, 2017; Thomas and O’Reilly, 2016).
Individual-based refers to systems where each
individual files their own tax return on their earned
and unearned income regardless of their marital
or cohabiting status; family-based refers to joint
filing in couples. In family-based taxation (or joint
filing systems) the same tax rates apply to singles
and households with multiple adults, but the way
thresholds are set to account for the fact that
income covers two or more people varies across
countries and can affect incentives to work by
changing the net returns to employment. This is
because the second earner pays tax rates at the
higher brackets of the income tax schedule.16
16 Coehlo et al. (2022) review these key features and the mechanisms through which they affect work incentives.
Deductions from taxable income or tax credits or
cash transfers based on household composition
and income are common. In SSA, 16 out of 54
countries allow deductions for children, and
sometimes dependants more generally, including
the elderly or spouses (McNabb and Granger,
2022), and this can affect work incentives of
adult household members. When the system is
combined with means-tested tax credits based
on family income, effective marginal tax rates on
second earners’ income can become very high
(Brewer et al., 2010). The choice over how to
design a progressive system of tax and benefits
for couples or families that minimises distortions,
from a normative point of view, will depend
on a range of assumptions and parameters,
including household decisions over work (paid
and unpaid) of the primary and secondary earner,
intrahousehold income sharing rules and social
prioritisation of family welfare relative to individual
welfare (Bargain, 2008; Kleven et al., 2009).
Family-friendly fiscal policies, such as subsidies
to childcare services and statutory paid
parental leave, may also affect gender gaps in
income and labour market outcomes. The arrival
of children affects women’s economic welfare and
time use more than men’s, and childcare support
and paid parental leave can help women combine
paid work and motherhood better. Subsidies to
childcare services can take many forms, from direct
public provision of services to subsidies provided
to households (demand-side) or providers (supply-
side). Parental leave fiscal policies include the cost
to the government of a cash transfer programme
for parents (more often mothers) of new-born or
adopted children for a certain period so they can

13 ODI Report
take time off work and look after their family.17
These subsidies can redistribute income, but can
also affect employment outcomes for women
more so than for men. To some degree, they
are thought to encourage the redistribution of
unpaid care work from mothers to the state and
men (UNICEF, 2019). They are likely to influence
women’s employment more than men’s not only
because they are sometimes targeted specially to
mothers – like subsidies to paid maternity leave
– but also because female labour supply is more
responsive to changes to taxes and benefits
(Fabrizio et al., 2020; IMF, 2012).
Considering the net effects of taxes and social
spending jointly on gender income gaps is
key, since individual instruments may serve a
multitude of objectives, one of which may (or
may not) be redistribution, including across
genders. The primary function of tax systems
is typically to mobilise revenue to finance public
spending. How revenue is raised matters, however,
not just for horizontal and vertical income
distribution, but also for other policy objectives,
including ensuring a conducive environment
for business and investment through stable
and transparent policy and fair and efficient
administration of taxes. Through adjustments to
relative prices, taxes can also provide incentives
or disincentives for consumption or production
that have wider costs or benefits to society
(usually addressed through excise taxes). Broad-
based consumption taxes are thought to be
less progressive but better able to raise public
funds efficiently, which can be used to finance
social spending that benefits women, including
17 Many countries have laws that entitle women to maternity leave, but this is not always paid leave, and if it is, it
is not necessarily paid by the government. For example, OECD countries except for the US have paid statutory
maternity leave, which includes income support for employed mothers around the time of childbirth (or in
some countries, adoption) to cover some of their wage whilst looking after their new children (OECD Family
Database, last updated in December 2022; see www.oecd.org/els/family/database.htm).
progressive programmes. Social protection
systems may also have multiple objectives,
including smoothing consumption over a lifetime
and reducing poverty. Choices over how to
balance social insurance and poverty alleviation
will vary across countries, with some having a
smaller focus on poverty alleviation, and this will
mediate the gendered impact of systems. The
fact that women live longer than men on average
can perhaps provide some legitimate grounds
for differentiation in social security contributions
and income from pensions and annuities in a
more actuarial-based system, including providing
different annual benefits for similar contribution
histories (Stotsky, 1997).
Several tax and spending instruments are
covered in the analysis. On the tax side, the
focus of this report is on the following: i) direct
taxes (the evidence covers mainly PIT on earned
income and some studies on property and land
taxes, but some discussion on corporate income
tax (CIT) and other wealth taxes is provided); and
ii) indirect taxes. Simplified tax schemes for small
businesses and other non-tax public fees are also
included in the discussion since this issue has been
at the centre of debates in LICs. On the spending
side, the following categories are covered: i) cash
(or direct) transfers, both contributory and non-
contributory; ii) indirect subsidies; iii) subsidies
to childcare and parental leave; and iv) in-kind
transfers on education and health (often the two
largest and easiest to allocate in-kind transfers).
Investment in infrastructure, including roads,

14 ODI Report
water and sanitation, despite its importance for
women’s outcomes and gender inequalities, is
beyond the scope of this report.
Tax administration practices, including
differences between male and female tax
officials, may have gendered impacts on
effective tax burdens. In the context of tax, this
area is capturing more attention from policy-
makers and researchers (ATAF, 2022; Joshi et al.,
2020). An emerging body of descriptive evidence
suggests that there are likely gendered impacts of
tax enforcement because of gendered differences
in tax officials’ behaviour and because different
types of activities are subject to varying degrees
of monitoring and harassment by tax officials.
This is not covered in this report, but it is a
fruitful area for further research on the gendered
impact of fiscal policies. The issue of how benefit
administration may have gendered impacts on
the incidence of benefits could also be explored
further.
Finally, it is important to note that the sources
of gender income inequality are complex
and are affected not only by tax and social
spending, but also by social norms and other
legal rights, and are in turn shaped by other
policies. Of course, gender income inequalities
and labour market outcomes are affected by
other factors, including social norms and legal
rights, beyond tax and social spending, which vary
significantly across contexts (Hyland et al., 2020).
This is important to consider when contemplating
the potential role of tax and spending in
addressing gender income and employment
gaps. There might be alternative policy tools
that may be better suited for addressing
economic inequalities or policies that may be
complementary to fiscal ones.
2.3 Outcomes, measurement and the
evidence base
Examining gender inequalities in income or
consumption expenditure requires quantifying
these outcomes at the individual level,
but this is challenging due to problems of
measurement and conceptual issues. Most
income and consumption data sets measure
unearned income sources and expenditure at the
household level; often only work-related income,
such as wages or pensions, is reported at the
individual level. There are many reasons why this
is the case. Many assets are jointly owned by adult
members (particularly relevant for couples). It is
very difficult to attribute specific expenditures
related to public goods, such as housing-related
consumption, to each adult member or children,
except for some attributable spending like school
fees or sanitary products for women (Bargain,
2022). Furthermore, unobserved, complex
and dynamic bargaining processes within the
household, driven by a range of factors including
differences in information, preferences and
outside options, vary across genders, often
resulting in uneven resource allocation (Bargain,
2022; Chiappori and Mazzocco, 2017). This
potential inequality within households matters for
redistribution across genders and across income
strata and individual poverty.
The literature has traditionally assumed
equal intrahousehold resource allocation, or
sometimes the other extreme of no income
pooling. The traditional approach, used in most
fiscal policy incidence and simulation studies, is
to assume that all household members pool all
their incomes and economic resources and share

15 ODI Report
them equally.18 Some authors have used this and
compared the incidence of tax and transfers on
households with different gender characteristics:
female- or male-headed, or proportion of female
members (Astudillo et al., 2022; Greenspun,
2019; Grown and Vadiola, 2010). However, this
approach, based on the so-called unitary model
of household decision-making, has long been
considered unrealistic and problematic (Alderman
et al., 1995). It can lead to biases in assessing
inequality and poverty at individual level, including
between women and men, often underestimating
female and child poverty and gender gaps in
income and consumption (Avram and Popova,
2022; Bargain, 2022; Findlay and Wright, 1996;
Karagiannaki and Burchardt, 2020). Other studies
assume minimum or no income pooling and
compare only individually perceived earnings
and benefits, before and after direct tax and cash
transfers, between men and women (Avram and
Popova, 2021).
There have been efforts to estimate more
realistic and context-specific intrahousehold
allocation rules to estimate individual-level
income and resources. Bargain (2022) has
developed a practical method to estimate
bargaining power, allocation rules and resulting
individual-level incomes and expenditures. This
finds that the source and recipient of income
matters for intrahousehold bargaining power
18 In practice, many studies use equivalised income, that is equivalisation scales that consider household size and
composition and varying needs when comparing income across households. A household of two adults in a
couple will have different needs to a household with one adult and one child, in terms of housing and other
consumption items.
19 Bargain (2022) finds that, in South Africa and Argentina, the net income (from earnings and benefits) received
by the wife commands a higher share of the resources allocated to her and her children. This paper is part of
the Commitment to Equity institute’s effort to develop systematic and practical approaches to calculate the
incidence of tax and transfers across the income distribution and between genders applicable across countries
at different levels of development.
20 See Avram and Popova (2022) and Figari et al. (2011) for a more detailed discussion of the different ways to
look at income inequality between genders.
21 See Appendix 1 in Granger et al. (2022) for a detailed explanation of how different income measures are calculated.
and resource allocation.19 We refer to the type of
methodology used when discussing the evidence
in the next section.
Once incomes and expenditures are quantified
using a given methodology, there are many
ways in which income inequality between
genders, and how fiscal instruments affect it,
can be computed, and this report considers
a range of measures.20 Many of the studies
reviewed in this report look at ratios of average
female-to-male market incomes (that is,
before tax and benefits) and compare this with
incomes after tax and transfers (e.g. disposable
incomes when personal income taxes, social
security contributions and cash transfers are
considered).21 A larger gender gap is associated
with a lower income ratio and vice-versa; if the
gap in disposable income is smaller than the gap
in market income, then the tax-benefit system has
an equalising effect between genders (Avram and
Popova, 2021; Doorley and Keane, 2020). Other
studies look at within-household inequality, in
particular the share of women’s income in total
household income. Some studies look solely at
the incidence of in-kind transfers in education and
health by gender.
Labour market outcomes include work
incentives measured by tax rates and other
employment outcomes. Tax rates include

16 ODI Report
average tax rates (ATRs), effective marginal tax
rates (EMTRs) and participation tax rates (PTRs)
at the individual level. PTR is a synthetic measure
that quantifies the combined impact of the
taxation of (formal) earned income and the loss
of out-of-work benefits on the monetary returns
in entering (formal) employment from different
out-of-employment states, including inactivity
and short-term and long-term unemployment.
Employment outcomes consider being employed
in formal or informal work, hours worked and pay
and differences between women and men.
The report provides a review of the available
(and limited) evidence on the combined
impact of taxes and social spending on income
and poverty gender gaps, as well as studies
of the impact of individual fiscal instruments
on income (or living standards) and labour
market outcomes in countries with different
income levels. Gendered fiscal incidence studies
have become more common in the last decade,
particularly from HICs, but evidence is still scarce,
partly due to data and measurement challenges.
In contrast with the evidence on the vertical
distributional impact of tax and social spending
reviewed in Granger et al. (2022), which includes
studies examining the combined impact of a
comprehensive set of fiscal instruments, when
considering gendered impacts, most existing
gendered incidence studies have looked at sub-
groups of taxes or transfers – the few exceptions
include Greenspun (2019) and Ambel et al. (2022).
Most of the evidence examined in this report
is based on fiscal incidence or microsimulation
country-level studies looking at the impact of
tax and spending policies on living standards
(income or consumption levels) at a point
in time and work incentives and outcomes,
by gender or type of earner. These studies
combine a range of methodologies including
microeconomic simulation using several
economic assumptions with microlevel data,
usually household surveys covering income and
expenditure, augmented with administrative
data. These are static models, at a point in time,
based on household income and expenditure
survey data, administrative and national account
information, fiscal policy details, incidence
assumptions and allocation rules. They do not
consider the lifetime of individuals, and hence
do not consider intertemporal effects; they do
not consider general equilibrium effects and
how individuals may change their behaviour in
response to policy changes. The direct impact
on living standards is referred to as first order
impact in the context of microsimulation and fiscal
incidence analysis. The impact on work incentives
is considered indirect or a second order outcome.
Lustig (2018) and Granger et al. (2022) provide
useful explanations of this methodology.
Given the paucity of evidence, when relevant,
economic principles combined with evidence
of the impact of fiscal policies on vertical
income inequality are used to shed light on the
potential impact on women and gender gaps.
For example, we draw on Granger et al.’s (2022)
review of the evidence on fiscal policy and income
inequality. We also include studies that look at
the impact of tax and spending on work patterns
and income using other methodologies, such as
regression analysis and structural models.
2.4 Policy challenges and
opportunities
Since the 1980s there have been increasing
efforts by several countries at different
stages of development to apply a gender lens
throughout fiscal policy-making, including the
budget process and implementation, evaluation
and monitoring. The term gender budgeting

17 ODI Report
was first introduced in Australia in the 1980s, and
is a loose expression to refer to governments’
efforts to integrate gender considerations in tax
and spending policy-making, including how to
practically use fiscal policy to close gender gaps
(Stotsky, 1996; Welham et al., 2018). In the United
Kingdom (UK), efforts have been pioneered by the
Women’s Budget Group, including their work for
the Commission on a Gender-Equal Economy.22
As noted in Section 1.1, several multilateral
organisations have emphasised the importance of
using gender-sensitive tools in their budget cycles
to reverse or mitigate gender inequalities.
The scope and nature of what countries do in
terms of gender budgeting vary from context
to context. In most cases, enacting gender-
responsive fiscal frameworks and individual
policies is not systematically mirrored by
aligned public finance management (PFM)
systems. Kolovich and Martinez-Leyva (2019)
report that more than 80 countries have adopted
gender budgeting practices with varying levels
of complexity and design. A recent OECD survey
on approaches to tax policy and gender equality
in 43 countries found that gender equality is an
important consideration for most, and about half
have introduced reforms to their PIT with the
aim of improving gender equality (OECD, 2022).
However, Alonso-Albarran et al. (2021), from the
IMF, find that, while gender budgeting processes
have become more widespread, and spending and
taxation have been structured in G20 countries in
ways that advance gender equality, ‘the budgetary
tools to operationalise, evaluate, monitor
and audit these policies remain more limited’.
22 See Women’s Budget Group (2020).
23 Stotsky (2020) reviews the rationale for using fiscal policy and PFM to promote gender equality and different
international perspectives from several developing countries, highlighting the key role that government
leadership plays in setting a legal framework and implementing policies and programmes to foster gender
equality.
Although countries have sought to link objectives
and indicators to gender in a range of budgetary
activities, few conduct ex-ante assessments of
proposed policies on gender equality, still less
ensure that gender impact assessments of existing
policies are carried out and used strategically
to improve policy design and implementation.
Government financial reports seldom include
gender-disaggregated figures.23
Global surveys find that political support
for gender equality, legal requirements that
sustain effort over time, the involvement
of ministries of finance, the participation of
other key government and civil society players
as catalysts and alignment with national
gender equality goals all matter (Alonso-
Albarran et al., 2021; Kolovich, 2018; OECD, 2022).
Embedding gender budgeting in law ensures
continuity when political actors change. Austria,
Bolivia and Rwanda mandate using a gender
lens in the budget cycle in their constitutions,
and other countries include provisions for
gender budgeting in finance laws. The role of
the ministry of finance is central, and can guide
other ministries such as education and health or
social protection to adopt gender-related goals
and align budget allocations to these goals. In this
regard, Uganda is often held up as an example of
the effective application of gender-responsive
approaches to the budget process (Stostky,
2016; Welham et al., 2018). However, as argued
in Welham et al. (2018), ministries of finance in
low-capability contexts operate within weak PFM
frameworks and have low levels of resources to
coordinate across other departments.

18 ODI Report
Even when political support is strong, key gaps
in gender-differentiated data and expertise in
gender analysis remain, limiting governments’
ability to track progress and inform joined-
up policies. OECD (2022) found that most
of 43 countries studied have access to sex-
disaggregated data on earned incomes and labour
market outcomes, but few have information
on detailed consumption expenditures, land,
property and other assets. Many LICs lack the
gender-differentiated data to conduct timely
gendered analysis of the impact of actual and
potential fiscal policies (IMF, 2022). Administrative
data is still not available in many countries, and
few countries that collect administrative data and
share it with researchers record the sex of the
taxpayer. Alonso-Albarran et al. (2021) highlight
that, even when gender-disaggregated data is
available, analytical expertise is low, efforts are
disjointed between government departments
and there is little systematic guidance to facilitate
gendered analysis.
Many experts and advocates are working
with countries to improve data infrastructure
and analytical capacity to evaluate ex-ante
and ex-post fiscal policies through a gender
lens. The World Bank and the UN publish gender
aggregate statistics on a range of indicators
relevant for gender equality and women’s
empowerment.24 The IMF is launching an internal
‘Gender Data Hub’ giving Fund staff access to
standardised and comparable cross-country
gender-related indicators (IMF, 2022), as well as
supporting national efforts and collaborating
with international partners including the World
Bank. The African Tax Administration Forum
(ATAF) is helping to strengthen the efforts of
24 The UN Minimum Set of Gender Indicators can be accessed at https://gender-data-hub-2-undesa.hub.arcgis.
com. The World Bank’s Gender Data Portal can be accessed at https://genderdata.worldbank.org.
African revenue administrations to collect gender-
disaggregated tax record data to inform gender-
sensitive tax policies (ATAF, 2022).

19 ODI Report
3 The impact of fiscal policy on gender
income inequality
25 The countries studied are Denmark, Greece, Ireland, Netherlands, Romania and the UK, using micro-level data
from 2017 and EUROMOD or similar country-specific microsimulation models. These countries have largely
individualised systems of direct income taxation and hence direct taxes, and cash transfers, can be split
between spouses in a more straightforward manner to estimate an individual’s market income, tax liability and
benefit entitlements.
26 Belgium, the Czech Republic, Germany, Finland, France, Romania, Spain and the UK. The authors use micro-
level data from 2014 and EUROMOD models. Their country choice aims to provide variety in terms of welfare
states, including defamilisation policies (see Avram and Popova, 2022: Section 2.3.2) and tax transfer systems,
and resulting work and income differences between genders (see ibid: 8). They include direct taxes and social
security contributions, means-tested, family and other categorical cash transfers, including parental leave.
3.1 Combined tax and spending
Emerging evidence from HICs shows that,
across most countries studied, direct taxes
and cash transfers combined reduce the
gender gap in pre-fiscal income, although it
does not eliminate it. Most studies examine
European countries and consider either samples
of heterosexual two-earner couples (Figari et
al., 2011) or the whole population (Avram and
Popova, 2022; Aziz et al., 2016; Doorley and
Keane, 2020; Doorley et al., 2022). They all show
that direct taxes and cash transfers combined
(including social security benefits) reduce gender
income gaps.
The magnitude of the gender pre-fiscal
income gap and the effect of direct tax and
cash transfers in reducing it varies by type of
instrument and instrument design and context.
Doorley and Keane (2020) find that, of six
European countries examined at a point in time,25
the gap between men’s and women’s income goes
down the most in the Netherlands (14 percentage
points (pp)) and the least in Romania and Greece
(5pp). In terms of relative contribution, cash
transfers play a similar role to taxes in Denmark,
Ireland and the UK, a more important role in
Romania and Greece (where FLFP is low), and a
less prominent role in the Netherlands (where
FLFP is high, and the direct tax system is highly
progressive). Avram and Popova (2022) examine
eight European countries26 and show that tax and
cash transfers combined reduce gaps in income
by around 20pp in the UK, Romania and the Czech
Republic (countries with the highest initial gap
in earnings and transfers strongly targeted to
women), 10pp in Germany, Belgium and France,
and by less than 5pp in Finland and Spain. They
conclude that, generally, cash transfers reduce
gender income gaps to a greater extent than
taxes except for old-age pensions, which have a
contributory component based on labour market
histories. Figari et al. (2011) argue that the tax-
benefit system is more equalising in countries with
more gender equal norms in terms of division of
labour in the household.
The magnitude of the equalising effect of tax
and cash transfers varies across household
and individual characteristics, such as having
children or being elderly. Avram and Popova
(2022) estimate that the equalising effect is higher
for couples with children. However, despite the
larger impact of the tax and transfer system,
earning gaps for couples with children are higher

20 ODI Report
to begin with, and hence they end up with higher
gaps in disposable incomes. Avram and Popova
(2022) also show that old-age pensions are not
equalising, particularly in countries where there is
a strong link between work-related contributions
and pension income.
The observed reduction in gender income
gaps arises mainly because most of the
studied countries have progressive systems
and women are more likely to be poor than
men. That is, taxes and transfers reduce pre-
fiscal income gaps, mostly due to existing
gender differences in paid (working patterns
and wage differentials) and unpaid work,
particularly after having children, rather than
from explicit discrimination against women
in the laws governing these systems and their
implementation. For example, according to
Doorley and Keane (2020) most of the gap in pre-
fiscal income is due to work gaps in countries such
as Ireland and the UK. Avram and Popova (2022)
also highlight the important role that gaps in
earnings play in determining income gaps between
genders, and Aziz et al. (2016) and Andrew et al.
(2021) emphasise that inequalities in earnings
increase significantly with parenthood.
A small number of studies look at the
combined impact on gender income gaps of
direct taxes, indirect taxes and subsidies,
and cash and in-kind transfers in the form
of free education and health services. They
27 Greenspun (2019) examined five LMICs (Brazil, Colombia, the Dominican Republic, Mexico and Uruguay)
using Commitment to Equity harmonised data. Greenspun considers household-level income by type of
household according to the gender of the main breadwinner or the head. She finds that fiscal policy reduces
income inequality and poverty within all household groups, and the most for female-headed households which
are nonetheless the most disadvantaged. This group in turn benefits more from government subsidies and
transfers than male-headed households, in most countries. Greenspun highlights the need for further research
to establish a method to collect individual-level consumption and household allocation rules in household
surveys, as well as to allocate household-level income and consumption expenditure across members of a
household to look at individual-level fiscal incidence (as in Ambel et al., 2022 and Bargain, 2022).
show that these instruments combined
also result in a reduction in the income gap.
Ambel et al. (2022), looking at Ethiopia, consider
the income distribution of women and men
separately before and after fiscal intervention.
They show that the Ethiopian system has an
equalising impact on income distribution for
both genders. Their estimates suggest that
most of the overall inequality in (pre- and post-
fiscal) income distribution is accounted for by
within-gender inequality rather than inequality
between genders. They also find that the overall
system reduces the gap in absolute poverty
rates between genders. Furthermore, taxes and
transfers can affect each gender differently. Cash
and in-kind transfers promote gender equality
better than indirect subsidies. Aziz et al. (2016)
consider the same policy instruments, except
indirect subsidies, and use other intra-household
allocation rules in the context of New Zealand.
They find that the fiscal system reduces income
disparities between genders.27
The combined impact of direct tax and cash
transfers on gender income gaps during the
Covid-19 pandemic is likely to be mediated by
complex interactions between pre-existing
patterns and changes in labour market
outcomes of both men and women and
design details of the tax-transfer system and
discretionary measures. Emerging evidence
from European cross-country studies shows this
is the case across the income distribution. Given

21 ODI Report
that women are likely to be over-represented in
the lower part of the income distribution, gender
income gaps will likely be mediated by similar
factors (Canto et al., 2021). The role of fiscal policies
in LICs is much smaller and, despite substantial
efforts to provide protection against the Covid-19
shock, the impact was limited across the income
distribution (Granger et al., 2022). However, while
there is emerging evidence of the larger negative
impact of Covid-19 on women’s earnings relative
to men’s (e.g. Dang and Nguyen, 2021), there is
no systematic cross-country evidence on the
impact of fiscal policy on the gender income gap
in the context of Covid-19. One recent study,
from Ireland, shows that Covid-19 affected men’s
employment negatively while women were more
protected due to pre-existing occupational and
industry segregation – they were more likely to be
essential workers than to hold locked-down jobs,
and hence were more protected from shocks than
men (Doorley et al., 2022).
Evidence on (formal) work disincentives
created by direct tax and cash transfers
suggests that these are larger for women
than for men, particularly women with a male
partner and children. Thomas and O’Reilly
(2016) find that the fiscal penalty faced by second
earners (usually women) when moving into formal
employment from short-term unemployment or
from inactivity in 31 OECD countries is high, and
higher in countries with family-based (elements
of) taxation and benefits, and higher still for
second earners with lower incomes. This is likely
disincentivising women’s part-time work. Borella
et al. (2023) argue that in the US, where both
28 Their measure of formalisation tax rate (FTR) captures the percentage of earnings in informality that would be
lost due to increased social insurance contributions and income tax payments or benefit withdrawal upon entry
to formal employment.
taxes and old-age pensions depend on marital
status, removing these marriage-related features
could increase the labour supply of married
women significantly over their lifetime. Kitao and
Mikoshiba (2022) provide similar evidence for
Japan. Jara et al. (2022) show that formalisation
tax rates are higher for women than for men in the
five Latin American countries under study, mainly
due to women’s over-representation in the lower
part of the income and skill distributions, and
their greater likelihood of being self-employed.28
These studies ignore other fiscal policies that can
affect women’s work incentives, such as childcare
subsidies or parental leave.
3.2 Individual instruments
3.2.1 Direct taxes
Evidence from cross-country studies shows
that gender income gaps are smaller in
countries with personal and earned income
taxes that are more progressive and broadly
individual-based, rather than family-based. In a
range of HICs with more progressive PIT systems,
men were found to pay higher taxes than women
mainly because they earn more, not through
a specific pro-women provision in law. Less
progressive (earned) income tax implies that men
pay similar tax rates to women, and hence is less
equalising or sometimes unequalising (Avram and
Popova, 2021; Doorley and Keane, 2020). Coehlo
et al. (2022) present new evidence on the effect of
PIT and social security contributions for a number
of HICs and UMICs. PIT reduces the gap between
women’s and men’s income in most countries

22 ODI Report
except the US, and its effect is smallest in UMICs.29
Social security contributions widen the gap in
most countries, though the impact is small. Some
country-specific studies show similar results.
Evidence from Argentina on the incidence of
(progressive and individual-based) direct taxes on
households separately by the gender of the head is
consistent with this, with male-headed households
paying more taxes than female-headed ones
(Rossignolo, 2018). There is a paucity of cross-
country studies showing evidence for LICs.
PIT that are more progressive and based on
individual taxation often achieve higher levels
of gender equality not only because of their
redistributive effect, but also because second
earners (usually women) are likely to have
better incentives to engage in (formal) work,
and work longer hours.30 Drawing on evidence
for nine European countries, Figari et al. (2011)
show that lower earners within a couple often face
higher marginal tax rates in countries with joint
taxation systems, such as France and Germany.
This reduces the hours second earners work,
resulting in lower market income. Evidence shows
that married women’s labour supply, particularly
married or lone parents, is highly responsive to
net-returns; compounded with higher marginal
tax rates faced by second earners (usually women)
from joint taxation systems, this translates into
lower employment rates and fewer hours worked
29 The other countries in their analysis are the UK, Australia, Austria, Italy and Panama, and UMICs Brazil,
Colombia and South Africa. See Coehlo et al. (2022: Figure 2).
30 There is an extensive literature looking at the impact of PIT and social security contributions on incentives to
work for women and on female labour supply of single women, in dual-earner couples and with or without
children, using programme evaluation and behavioural models (static, dynamic). These are not systematically
synthesised in this paper. Most of the evidence comes from HICs. Borella et al. (2023) provide a review of the
literature looking at married couples.
31 Coehlo et al. (2022) also argue that optional individual taxation (in the context of household taxation) does
not provide a solution to the negative effects from household taxation since it is not in the interest of the
household to file individually if they are to maximise net income.
32 See, for instance, ATAF (2022) and the website of the World Bank Global Tax Program on Gender Equality and
Tax Reform (www.worldbank.org/en/programs/the-global-tax-program/gender#1).
(Evers et al., 2008; Blundell et al., 2016; Bick and
Fuchs-Schündeln, 2017). Coehlo et al. (2022) show
that there is a positive cross-country correlation
between the progressivity of the PIT and the
probability of working (extensive margin) and
hours worked (intensive margin) of women in
lower parts of the income distribution. They
also argue that household taxation decreases
incentives to work for second earners while
encouraging primary earners to work more
hours.31 These authors and Thomas and O’Reilly
(2016) provide a discussion of how tax features
may disincentivise to a higher or lower extent
female (formal) labour supply, and that these
effects can vary across states, e.g. transitioning
from short-term unemployment or from inactivity
to employment.
In LICs, the absence or lower levels of income
thresholds, sometimes below poverty lines,
above which individuals are liable for PIT are
likely to disadvantage women more since
they are over-represented among the poor.
ATAF (2022), surveying 16 African countries,
argues that this is a key source of implicit bias
against women in tax systems. Policy-makers,
researchers and other stakeholders in Africa and
elsewhere are embarking on efforts to improve
gender-disaggregated data and analysis to
better understand the impact on gender income
inequality. 32

23 ODI Report
Tax reliefs that reduce progressivity of PIT
can significantly impact gender income gaps
by benefiting higher earners (men) more than
lower earners (women).33 Many of these tax
reliefs are employment-related (travel expenses,
overtime payments, employer-provided pensions)
and benefit those with enough income to be tax-
registered. As a result, they benefit men more than
women due to differences in formal earnings and
income (Grown and Vadiola (2010) show evidence
of this in a range of non-HICs). In addition,
the value of these reliefs or other deductions
(expenses that are deducted from the tax base) is
larger for higher earners in upper income brackets
in progressive tax systems, who tend to be men.
Redonda and Axelson (2021) show evidence of this
for pensions relief in South Africa. Gunnarsson
et al. (2017) discuss the different reliefs and their
gendered impact in European countries.
Tax credits, which reduce tax liabilities
rather than the amount of taxable income, in
particular refundable tax credits, are more
equitable and better targeted to lower-income
families since their value does not depend on
the marginal rate. Nhamo and Mudimu (2020)
show that the progressivity of the PIT in South
Africa improved when reliefs for medical expenses
33 These include reductions in the base (i.e. taxable income) through tax-free allowances or deductions such as
contributions to specific savings (like pension contributions), expenditures (such as work-related transport or
private health or childcare) or dependent family members (e.g. children or spouses), as well as rebates and tax
credits (such as working tax credits or child tax credits).
34 Goldin and Michelmore (2022) provide evidence of the incidence of the tax credit before becoming refundable
and show it was not well targeted to the poor.
35 According to Lahey (2018), based on World Bank Group (2015: 16–17), these are Benin, Brunei Darussalam,
Burkina Faso, Cambodia, Republic of Congo, Fiji, Guinea, Indonesia, Iraq, Laos, Malaysia, Morocco, Niger, the
Philippines, Togo and Tunisia.
36 Interestingly, Blundell et al. show that, for the UK, the conditionality of working at least 16 hours a week
encourages lone mothers of young children, who often have lower levels of education, to take up part-time jobs
only for the duration of the subsidy, having no impact on their wages or their employment in the long term.
This is partly explained by the fact that part-time jobs are less effective in accumulating experience according
to their estimates, and because the return to experience is low for low-skilled workers (Blundell et al.). Despite
this, moving from a joint income to individual income to assess eligibility for tax credits would be welfare-
reducing overall.
transitioned from deductions to tax credits, and
argue that it would be even better targeted to
lower-income households with low tax liabilities
if refundable. Bastian (2023) shows that the
introduction of refundable tax credits in the US
in 2021 was equalising.34 Some countries still have
provisions that are explicitly targeted to men and
against women.35
Tax reliefs can affect working patterns of
main and second earners in couples and single
parents differently. For example, tax reliefs
for overtime may encourage the main earner
to work longer days and hence do less unpaid
domestic and care work, shifting the burden to
the second earner. Tax reliefs for childcare costs
may have the reverse effect. In-work tax credits
based on household income may encourage lone
mothers into work while disincentivising married
or cohabitating women (see Blundell et al., 2016
for the UK).36 Bastian and Lochner (2022) show
that earned tax credits increased FLFP at the
expense of leisure, housework and time spent with
children, though not time spent on active learning
or enrichment activities. Kitao and Mikoshiba
(2022) show that the removal of dependent
spouse and pension tax rules in Japan would
increase FLFP.

24 ODI Report
The global tendency towards less progressive
PIT systems, and the prevalence of dual
income tax models that tax capital income
or capital gains at a lower rate, is likely to
have disadvantaged women relative to men
because they are more likely to be poor, own
less capital and earn less capital income. This is
again because women are over-represented in the
lower part of the earning, capital income and asset
distribution spectrum. Gunnarsson et al. (2017)
discuss this issue in detail in the context of the
EU. Stewart (2017) presents similar evidence from
Australia, suggesting that less progressive systems
undermine efforts to achieve gender income
equality. Granger et al. (2022) discuss global trends
towards less progressive PIT systems and the
common unequalising impact of lower tax rates on
capital income and capital gains across countries.
Coehlo et al. (2022) discuss this in the context of
gender inequality.
Similarly, the global trend towards
lower rates of CIT and the prevalence of
investment incentives is likely to benefit men
disproportionally. There is no evidence of the
static fiscal incidence of CIT on households or
individuals by gender. As discussed in Granger et
al. (2022), a few recent studies provide estimates
of how incidence may be distributed across
different types of workers or capital owners. In any
case, lower rates of CIT and investment incentives
are likely to benefit men more than women. This is
because women are less likely to own companies.
37 Presumptive taxation uses indirect means to ascertain tax liability, where the base of taxation (direct or
indirect) is not itself measured but inferred from some more easily measured indicators. These regimes
take many forms, including applying a fixed or scaled rate on turnover or levying fixed amounts based on
other means to ascertain taxable income and tax liability (like seating capacity of transport vehicles for small
transport operators) for micro traders, often self-employed. See Wei and Wen (2019) for a discussion of
optimal turnover thresholds and tax rates for small and medium-sized enterprises (SMEs) and a list of some of
the countries that operate such a system.
38 Thuronyi (1996) has a helpful discussion of the rationales for using presumptive taxation.
39 Evidence summarised in Joshi et al. (2020) includes Caroll (2011), for women in Ghana; Dube and Casale (2017) for
Zimbabwe; Akpan and Sempere (2019) for women traders in Nigeria; and Jalipa and Othim (2020) for Kenya.
Simplified (presumptive) tax regimes for
micro and small businesses and other fees for
small traders may negatively affect women
to a greater extent, but more evidence is
needed to ascertain how it may affect gender
income gaps across countries. Many countries,
particularly LICs, operate simplified (presumptive
tax) regimes for enterprises with turnovers
below a certain threshold, instead of CIT or PIT.37
The rationales for their use include fairness
and revenue considerations, whilst minimising
compliance and administration costs.38 Some
countries operate schemes that combine a large
number of taxes and contributions and entitle
taxpayers to access social protection (such as
Monotax in Uruguay and Argentina or Simples in
Brazil (Gonzalez, 2022; ILO, 2019). These benefit
vulnerable groups, including women, who have low
contributory capacity and hence may be excluded
from the tax and transfer system in the absence
of this type of simplified scheme. In African
countries, presumptive taxes are prevalent though
not directly linked to social protection access. In
addition, local public services are funded through
user fees, which are set out in a less transparent
way than regular income taxes (Joshi et al., 2020).
Joshi et al. (2020), based on a small emerging
body of descriptive evidence, argue that fees
for market access can result in a high tax burden
for small traders with low or non-positive profit,
resulting in regressive and horizontally inequitable
taxes and fees to the detriment of small market
traders, often women.39

25 ODI Report
Regressive property or land taxes can affect
women more than men. The evidence is
scarce, however. Komatsu et al. (2022), using
administrative data on land ownership by gender
and area-based land tax payments, show that
female-headed and female adult-only households
bear a larger tax burden than male-headed and
dual-adult households. In Ethiopia, the fact that
these taxes are area-based and do not consider
income or ability to pay, combined with small
landholdings and subsistence agriculture for
own consumption, makes them regressive. More
generally, when this type of tax and property taxes
are regressive (Granger et al., 2022; Komatsu et
al., 2022), this can exacerbate gender income gaps
given that women, including property owners, are
more likely to be poor. Furthermore, in contexts
where owners of large areas of land are poor, it
is difficult for such taxes to be progressive more
generally. Nonetheless, there are ways to design
general property taxes that are more progressive,
accounting for property values and considering
liquidity constraints (Granger et al., 2022).
Regarding broader asset taxes, men are likely to
pay more in these taxes than women. This is due
to the fact that men are more likely than women to
own an asset, to own a higher share of assets and
to hold any wealth, making this form of tax income-
equalising between genders (Coehlo et al., 2022).
However, broader wealth taxes are uncommon
and there is as yet no quantitative evidence on the
incidence of wealth taxes across genders.
There are instances of countries with laws
that explicitly discriminate against women in
the context of direct taxes, which may have
a differential impact on gender gaps. For
example, in Argentina ‘income in common’ is still
attributed to the husband for tax purposes, even
if the asset was acquired and managed by the wife,
so in principle tax liabilities will be higher for the
men for whom this is relevant (Grown and Vadiola,
2010). Until 2018, Greece required the husband
to file their spouse’s tax return, and husbands
were the recipient of any refund corresponding to
the spouse (Coehlo et al., 2022, who also provide
other examples).
A recent study shows that introducing
explicit bias in labour taxes favouring women
could increase women’s employment rates
in the long run without displacing men’s
employment. Rubolino (2022) shows that such a
policy in Italy improved women’s employment in
the long run, reduced the time spent on welfare
and did not displace men’s employment. The net
wage did not increase, showing that the cut was
borne by firms. Labour demand for women was
higher in sectors where women are traditionally
less likely to work to begin with. However, the
policy did not address the pay gap between
genders. In Argentina, director’s fees have a
higher threshold for taxation if the recipient is a
woman, and even higher if transgender, possibly
to encourage non-male board members. Another
example is the extra tax allowances for single
mothers in Ukraine and Uzbekistan and tax
exemptions for single women with at least three
underage dependents (Coehlo et al., 2022).
3.2.2 Cash transfers
Evidence from HICs shows that cash transfers
reduce gender income gaps, particularly
those targeted to lower-income individuals
and households. As discussed in Section 3.1,
there is a small evidence base showing that cash
transfers play an important role in reducing
income gaps in several European countries,
although to varying degrees (Avram and Popova,
2022; Doorley and Keane, 2020). Doorley et al.
(2018) show that the reduction in child benefits
and carers’ allowances implemented in Ireland

26 ODI Report
between 2008 and 2018 affected working-age
women in couples with children the most if no
income share within couples was assumed, but
the gap in income dissipated if the assumption
of perfect income sharing within the household
was used. There is almost no evidence from non-
HICs. Ambel et al. (2022) show that cash transfers
in Ethiopia are progressive, pro-poor and help
to reduce poverty for both men and women.
However, from the emerging evidence from
these contexts on the distributional impact of
cash transfers, we know that transfers do reduce
inequality and poverty (Granger et al., 2022).
Hence, they are also likely to reduce gender
income gaps given that women are poorer on
average than men across countries.
The impact of cash transfers on gender
income gaps can differ according to
whether transfers are contributory or non-
contributory and across demographic groups.
Contributory transfers are usually closely linked
to labour history, such as old-age pensions or
unemployment benefits. Because women are
less likely to be in continuous paid formal work
– and if they are, they earn less – they either lack
access to these benefits or the benefits are lower
than for men on average (Bastagli and Hunt,
2020; Lo Bue et al., 2022). Avram and Popova
(2022) find that women benefit more from non-
contributory transfers such as child benefits
than from contributory ones, though even some
of the contributory ones such as sickness and
unemployment reduce the gender income gap.
Old-age pensions are the only cash transfer
that amplifies the gender market income gap in
eight European countries among those aged 65
40 For example, since 2011–2012 in the UK adults who care for a child under 12 can apply for national insurance
contribution credits. See UK government’s website here.
41 These authors argue that there is little evidence on the effects of in-work cash transfers on wage levels, and
hence on the intended beneficiaries, making the use of these type of transfers questionable.
or over, though the effects vary in magnitude,
resulting in higher income gaps than for the
working-age population. To mitigate this effect,
many OECD countries provide special pension
credits to carers of children under a certain age
to make up for years spent outside the (formal)
labour market (OECD, 2021b).40
In HICs, cash transfers may impact
women’s work incentives in complex ways,
depending on their design and beneficiaries’
demographic characteristics, with mixed
evidence on how they affect labour market
outcomes. There is evidence showing that
child and means-tested benefits that are too
generous may discourage main carers, usually
women, from returning to (formal) paid work
in HICs (Christiansen et al., 2016). Magda et al.
(2020) show that the introduction of a large
universal child benefit decreased labour market
participation of mothers relative to childless
women in Poland. However, recent evidence
from Canada shows that the introduction
of a means-tested child benefit did not
affect maternal labour supply (Baker et al.,
forthcoming). Many countries, including the
UK, provide income top-up for lower-earning
households or impose job-search conditions to
encourage people on out-of-work benefits into
paid work. In the UK there is evidence that this
has pushed lone parents into part-time low-paid
jobs with poor career and wage progression
(Hoynes et al., 2023).41 Pensions and other
benefits based on contributions made when in
work may enhance work incentives by increasing
the return to (formal) work.

27 ODI Report
The evidence on LMICs tends to show no
consistent negative impact of cash transfers
on female labour market outcomes. A review
of the small body of literature, including some
women-only programmes and gendered analysis,
suggests that there does not seem to be salient
(formal) labour-leisure trade-offs with cash
transfers in LMICs, except for older individuals,
and transfers can have positive effects if they
are designed specifically to aid with job search
(Baird et al., 2018). The authors highlight that
cash transfers are still often temporary and not as
reliable as those in HICs. Some studies show that
cash transfers can positively impact female labour
market outcomes (Hagen-Zanker et al., 2017;
Salehi-Isfahani and Mostafavi-Dehzooei, 2018).42
Explicitly targeting cash transfers to women
in heterosexual couples may result in a
greater reduction in resource inequality and
poverty differences across genders. Targeting
cash transfers to women in the household is
increasingly common practice in LMICs not
only because of gender equality objectives but
also due to its potential impact on resources
allocated towards children (Hagen-Zanker et
al., 2017). Bargain (2022), using a new method to
allocate income and consumption to individual
members within a household combined with
fiscal incidence analysis, finds that increasing
benefits received by women expands the
resources in the hands of women and children
in lower-income households in Argentina and
42 Salehi-Isfahani and Mostafavi-Dehzooei (2018) find that universal cash transfers in Iran implemented in the
early 2010s increased female labour supply. Hagen-Zanker et al. (2017) review the literature on the impact
of cash transfers on women and girls. They find no marked difference between men and women in terms of
labour participation and intensity, whilst there are differences in the way men and women allocate their time to
paid work, self-employment and domestic work. See Granger et al. (2022) for a gender-blind discussion of how
cash transfers affect work incentives and a survey of the recent literature.
South Africa. Armand et al. (2020) show that
cash transfers conditional on children attending
school that were targeted to women instead of
men increased food expenditure, and Almås et al.
(2018) show how women receiving the transfers
enjoyed a better bargaining position in the
household in North Macedonia.
Imposing conditionalities on women-targeted
cash transfers may reinforce traditional gender
roles, disempowering women. Hagen-Zanker et
al. (2017) discuss some evidence that shows that
imposing conditionalities on women-targeted cash
transfers can also reinforce traditional gender
roles if these are dependent on children’s school
attendance or health checks that demand time
from carers, often women. These unintended
effects may be stronger in contexts with poor
supply of quality public services (education
and health) and infrastructure (transport) (UN
Women, 2019).
3.2.3 Indirect taxes and subsidies
The evidence base on the incidence of general
consumption taxes (sales taxes or VAT) across
genders is scarce. As discussed in Section 2.1, it is
difficult to measure individual-level consumption.
The few studies that have looked at the impact of
VAT on gender gaps in consumption or resources
have compared female-headed and male-headed
households. Grown and Vadiola (2010) find that
male-headed households bear a higher burden

28 ODI Report
of VAT in seven out of the eight countries they
studied.43 There are implicit biases in the incidence
of VAT on expenditure for some necessities,
such as food or children’s clothing and health
expenditure, in that female-headed households
bear the highest proportional burden, although
there is no consistent pattern across studied
countries. Aziz et al. (2016) estimate that, in New
Zealand, men and women pay a similar amount
of indirect taxes per capita before the age of 25,
but men pay a higher share of VAT and excises
than women from age 25–64, partly because a
higher share of income and consumption within
the household is allocated to the main earner,
frequently men. Ambel et al. (2022) find that
average consumption expenditure is lower for
women than for men in Ethiopia, and hence they
pay a smaller amount of indirect taxes, but a
similar amount as a share of expenditure. VAT and
excises increase inequality and poverty for both
genders. However, VAT is more unequalising for
men, suggesting they bear a higher VAT burden,
possibly due to higher consumption of VAT-able
goods with higher rates, such as tobacco and
alcohol. The poverty-increasing effect of VAT is
higher for women.
The evidence base on the general incidence
of VAT across countries shows that this tax
is poverty-increasing. Impacts on inequality
depend on the context and the rate structure.
For example, OECD (2014) finds that both VAT
and excise taxes (alcohol, tobacco and transport
fuel) are regressive and unequalising for most
43 Of the eight, the countries for which male-headed households bear the highest burden are Argentina, Ghana,
Mexico, South Africa, Uganda and the UK. In India and Morocco the burden falls most heavily on female-headed
households.
44 The incidence of taxes on consumption should be calculated as a share of consumption expenditure, rather
than income; this is used in LICs and LMICs as a measure of income given data limitations. Using this measure,
VAT is often proportional if the base is broad and the rate uniform, or given the structure of reduced rates and
exemptions, progressive and inequality reducing. But because lower-income households spend a higher proportion
of their income at a point in time, it is usually regressive and increases inequality along the income distribution.
of the 20 OECD countries in the study when
considered as a share of income at a point in
time.44 Cubero and Hollar (2010) find similar in
Central America. Evidence also shows that indirect
taxes are poverty-increasing in LMICs (Granger et
al. (2022) provide a summary of recent evidence
across countries on the incidence of VAT on
households along the income distribution).
A forthcoming study by Bachas et al. shows
that consumption taxes can be progressive
once informal consumption, prevalent among
lower-income households, is considered. This is
particularly relevant for LICs.
VAT exemptions or reduced rates can mitigate
the poverty and regressive impact of VAT, but
more cost-effective policy instruments may be
available to achieve this goal. Analysis synthesised
in Granger et al. (2022) shows that the benefits of
these favourable tax treatments accrue usually to
households and individuals that are better-off, since
they spend more in absolute terms. This pattern
is exacerbated in contexts, often LMICs, where
lower-income households purchase most of their
products from VAT non-registered vendors (Bachas
et al., forthcoming). Removing these reduced
rates and exemptions could fund more targeted
cash transfers to help lower-income individuals
and households, including women, more cost-
effectively. But if there are no means to implement
cash transfers, or cash transfers are not effective at
reaching women due to intrahousehold allocation
issues, then these exemptions or reduced rates
could be merited. Furthermore, generally applying

29 ODI Report
reduced rates to a group of goods and services
opens the door for lobbying for other arguably
similar products to be included on horizontal equity
grounds, fostering the proliferation of reduced
rates (Abramovsky et al., 2018; De la Feria and
Walpole, 2020).
Applying reduced rates or exemptions to
menstrual hygiene products may decrease the
tax burden faced by women in certain contexts,
but still may not be the most cost-effective
policy to help lower-income women. Many HICs
and LMICs have introduced exemptions, zero or
reduced rates for menstrual hygiene products
(Coehlo et al., 2022), and this policy continues to
be at the centre of public debate (see Higgins,
2017; Lahey, 2018). Evidence from Germany
shows that reductions in VAT rates for menstrual
hygiene products result in an equivalent reduction
in consumer prices (Frey and Haucap, 2022). In
LICs – where market access to these products
can be patchy, where cultural norms may shape
preferences for products other than sanitary pads
and tampons, and where access to menstrual
hygiene management safe spaces may be lacking
for many women and girls from lower-income
households – VAT reduced rates would likely benefit
better-off women and those purchasing expensive
brands, including imported brands (Coehlo et al.,
2022; Rossow and Ross, 2021). Ensuring access to
safe spaces to manage menstruation or providing
free sanitary pads or tampons in lower-income
areas and schools may be a more cost-effective
way to provide support to girls and women who
cannot access or afford these items (this policy has
been implemented in Kenya). If reduced rates or
exemptions are used for necessities, then menstrual
hygiene products should be included.
Reduced VAT rates on childcare services
used to facilitate access to employment after
having children may be considered optimal
if no lenient treatment is granted through
PIT deductions or credits or through directly
subsidised services at the point of use.
Childcare services help individuals, particularly
women given they are the main carers, to go back
to work, and as such it can be efficient to tax them
at lower or zero rates. But it is not clear that the
best option is to do so via consumption taxes,
which are more difficult to target to lower-income
parents for whom childcare costs may be a
constraint when deciding to enter or increase time
in work, and for whom distributional motivations
are stronger. In LICs and LMICs, providing quality
subsidised childcare may be more effective given
fewer children have access to affordable formal
childcare services (Devercelli and Beaton-Day,
2020). Grown and Vadiola (2010) argue that
targeting childcare provision directly from the
expenditure side is likely to be more cost-effective.
We discuss childcare services in more detail in
Section 3.2.4.
Finally, most economists agree that a broad-
based VAT with minimal exemptions or
alternative rates and a sufficiently high
threshold is the best way to raise revenues
and fund better-targeted spending policies
to reduce inequality and poverty, including
gender inequality. Even where consumption
taxes are regressive, and hence women shoulder
a higher burden on average, the net distributional
impact, as part of a broader fiscal system and
the social spending these taxes fund, is a more
important factor. A consumption tax that is
regressive and implicitly biased against women
can be efficient in collecting revenue and can
form an important part of a more equalising and
poverty-reducing fiscal system that addresses
gender income gaps, if it finances a well-targeted
transfer system that more than compensates the
poor and women (see, for example, Lustig, 2018;
Warwick et al., 2022). At the same time, there is

30 ODI Report
broad consensus that VAT systems that are full
of exemptions and differential rates, lacking a
clear policy rationale, generate inefficiencies and
administrative challenges.45
Empirical evidence on the impact of excises
on gender income gaps is scant – they are
often poverty-increasing and can be equalising
between genders if most goods on which
excise duties are levied represent a higher
share of men’s consumption expenditure.
For example, men are on average more likely
to consume more tobacco (Crawfurd and Le
Nestour, 2019) and alcohol (Nelson, 2014) than
women; hence the incidence of this tax would
be higher for men, narrowing gender income
gaps. Coehlo et al. (2022) argue that the reverse
may be true, i.e. men are receiving a higher value
of subsidies if the value of the duties does not
account fully for the internalities/externalities
generated, and this value would be highest in
countries with lowest relative female smoking
rates. They calculate that many countries set
tobacco taxes at a lower level than the World
Health Organization (WHO) recommends (at
least 75% of the tobacco retail price) and that the
implicit subsidy seems to be higher in countries
where the smoking rate among women is lowest.
Ambel et al. (2022) find that, in Ethiopia, excise
taxes have a small negative impact on income
inequality for both men and women, but the
analysis does not show the impact on the average
gender income or consumption gap. Grown and
Vadiola (2010) find that male-headed households
bear the highest burden of excise and fuel tax in
seven out of the eight countries they study.
45 See, for instance, Abramovsky et al. (2018) and Acosta-Ormaechea and Morozumi (2021). The latter found that,
in OECD countries, an increase in VAT revenues through removing exemptions and reduced rates is better for
economic growth than achieving the same revenue through increasing the standard VAT rate.
A small emerging evidence base suggests
that tariffs may magnify gender income gaps.
Recent studies find that the rate structure in
the US presents explicit biases against women,
particularly for apparel, and this, combined
with households’ higher budget share spent on
imported women’s apparel on average, results in
women bearing a higher share of the total tariff
burden relative to men (Gailes et al., 2018; Hatch,
2015). Artuc et al. (2021), using data from 54
LICs and LMICs and econometric methods, find
that tariffs reduce real income of female-headed
households slightly more relative to male-headed
households. They argue that protectionism
magnifies gender inequality because female-
headed households spend a larger share of their
budget on, but derive a smaller share of their
income from, agriculture products.
Indirect subsidies in the form of price
reductions for goods such as cooking fuel
or oil or food can reduce poverty, but
there is no evidence on their impact on the
gender income gap, which will depend on
consumption patterns and also be context-
specific. Ambel et al. (2022) find that wheat
subsidies in Ethiopia reduce poverty but are
unequalising for both men and women due to
their high level of regressivity. Kerosene subsidies
have no impact on poverty and a minor positive
impact on inequality for both genders.
3.2.4 Subsidies for childcare and paid
parental leave
Most HICs offer some form of paid parental
leave and some support for childcare in cash
or in-kind. Aims include improving mother and

31 ODI Report
child well-being and women’s employment
outcomes. However, there is a gap in the
evidence on the first-order impact of these
policies on gender income inequality. Förster
and Verbist (2012) looked at the incidence
of cash versus in-kind family transfers in the
form of childcare services, valued at the public
cost of provision, on child poverty and income
redistribution. They find that both instruments
are redistributive, and that cash transfers reduce
child poverty by more than in-kind transfers on
average, but they did not examine the differential
impact by the gender of adults in the household.
Dahl et al. (2016) show that, in Norway, increasing
the duration of paid parental leave from 18 to
35 months benefited better-off mothers, and
hence results in a negative redistributive effect.
Avram and Popova (2022) find that, overall, family
benefits, which include paid parental leave, reduce
gender income gaps.
There is a considerable body of evidence
on the impact of these policies on women’s
employment outcomes, mainly from HICs, but
estimating the causal impact of these policies
is challenging and findings are mixed and
dependent on a range of factors. Olivetti and
Petrongolo (2017) provide a detailed discussion of
how family policies have evolved in HICs and their
economic consequences, including for women’s
employment outcomes (whether they work or
not, how many hours they work and how much
they earn) and, in turn, their income in relation
to men. On the one hand, childcare policies and
parental leave may help with gender equality and
child development outcomes; on the other, they
could hinder women’s career progress. Isolating
the causal impact of these policies on outcomes
for women is challenging; these policies are
complex, vary considerably across countries and
interact with each other. Initial levels of women’s
employment as well as cultural and social norms
may also mediate these impacts. Subsidies to
childcare and pre-school education vary in their
design, generosity, quality and coverage across
countries; subsidised childcare may simply crowd
out informal or paid formal childcare leading to no
change in employment outcomes. Parental leave
policies vary in length, income support and job
protection, and whether this is available to either
or both parent.
Evidence from HICs shows that there is a
strong cross-country negative correlation
between what countries spend in formal
childcare subsidies as a share of GDP and the
number of weeks of paid leave available to
mothers and gender employment gaps. Using
a sample of 30 OECD countries, Olivetti and
Petrongolo (2017) argue that spending on early
childhood care as a percentage of GDP is the only
family policy that shows significant and positive
correlation with women’s probability of being
in employment. They also found that countries
with higher spending on early childhood care,
maximum weeks of leave available to mothers, and
total paid leave available to mothers tend to have
lower gender gaps in employment rates. However,
the analysis did not find any family policy that is
significantly correlated with reducing the gender
gap in earnings.
Evidence from country-specific studies in
HICs shows mixed findings on the impact
of increases in access to formal childcare
on maternal employment rates (and other
employment outcomes), depending on the
design of the policies, service quality, the
sample and context considered and the
methodology used. This variation is likely
attributable to: i) differences in the design and
implementation of childcare policies, such
as whether the reform led from no access to
part-time or to full-time access and whether

32 ODI Report
childcare is free or partly subsidised; ii) the
methodology used; iii) the demographics
considered, e.g. cohabiting versus single
mothers, characteristics of the children (age,
number and childcare setting), whether women
were working before the reform and accessing
childcare services already, and whether they
were working part-time or not, and their skills
and wages; and iv) the institutional, economic
and social contexts in which changes to access
through policy reforms took place (Cascio et al.,
2015; Morrissey, 2017; Olivetti and Petrongolo,
2017).46 According to a meta-analysis of country-
specific studies by Akgunduz and Plantenga
(2018), as methodologies have improved over
time and labour market characteristics have
evolved, the impact of childcare subsidies on
employment rates of mothers has declined.
Evidence from Germany shows that removing
private contributions to an already highly
subsidised service increased hours worked but
not employment rates (Huebener et al., 2019).
Emerging evidence from LICs and MICs
suggests that access to subsidised childcare
may increase mothers’ employment rates,
depending on the design and implementation
of these services. The evidence on hours
worked is mixed. A recent summary of evidence
(J-PAL, 2023) reviewing nine randomised
evaluations of childcare interventions found
that increased access can boost women’s
employment outcomes (five studies).47 When this
46 The policy reforms varied from increasing government subsidies to childcare to increased supply of childcare
facilities (e.g. reforms in 2002 in Norway and Luxembourg), expanding access to highly subsidised childcare
(e.g. in Italy from the mid-2000s), reducing the cost of childcare (e.g. in Germany and the US), introducing
free day care (distinguishing between half-time or full-time such as in the UK), changing the cut-off age of
preschool or school start (as in Spain and in France), reducing fees and providing full-day care (Canada) or
increasing government subsidies and spending on childcare with earned income tax credit (EITC) for parents
(the Netherlands).
47 The countries covered in the studies are Brazil, Burkina Faso, Chile, Egypt, India, Kenya, Mozambique, Nicaragua
and Uganda.
is not observed, it is likely due to the presence of
other barriers to women’s employment, such as
restrictive gender norms or lack of employment
opportunities, or low perceived or actual quality
of childcare. Halim et al. (2021) reviews 22 studies,
three of them experimental and the rest quasi-
experimental, and found that greater access
to subsidised childcare increased employment
rates among women in all studies except one.
While some studies find positive impacts on
earned income, sometimes by increasing business
productivity, and evidence of switching to more
productive jobs, others suggest that increased
labour market engagement is driven by low-
productivity work, such as unpaid family work,
and find no evidence of significant increases in
maternal income. Unsurprisingly, the design and
implementation of these interventions, including
the hours childcare centres operate and the age
of the children who can access them, and whether
all young children or just one are covered by
the intervention, will affect the impact of these
interventions.
The evidence from HICs on the impact of paid
maternity and paternity leave on mothers’
employment outcomes suggests that short
paid leave may improve mothers’ employment
outcomes on average, though extending it
beyond six months may have no or detrimental
effects. Earmarking leave for fathers with high
wage replacement rates may lead them to
take up leave and increase home production

33 ODI Report
including childcare, though the evidence on
gender employment gaps is still mixed (Canaan
et al., 2022). Paid leave for both mothers and
fathers can help women maintain a connection
to the labour market and facilitate the return to
paid employment.48 However, the longer the leave
and the higher the income replacement rate,
the greater the incentives to stay at home and
the higher the costs in terms of women’s career
progression, through reduced work experience
and increased costs to employers of hiring women
of childbearing age. Re-entry generally can be
more difficult (Mandel and Semyonov, 2006;
Olivetti and Petrongolo, 2017). Christiansen et
al. (2016) find that parental leave longer than
140 weeks can reduce female labour force
participation. Bergemann and Riphahn (2023)
show that reducing periods of parental paid leave
for mothers in Germany, transforming the scheme
from means-tested to universal and linking the
replacement rate to previous earnings led to a
quicker return to work after benefits elapsed.
Gangl and Ziefle (2015) found consistent evidence
from Germany showing that expansions to
maternity leave led to a decline in mothers’ work
commitment. Evidence from Norway shows that
extending paid maternity leave from 18 to over 30
weeks did not improve FLFP or women’s earning,
but was costly and had negative redistributive
effects (Dahl et al., 2016). Combined with a quota
for fathers and other reforms, the policy had no
effect on mothers’ probability of reaching top-
paying jobs and executive positions (Corekcioglu
et al., 2022). In their comprehensive review,
Canaan et al. (2022) highlight that heterogeneous
impacts across types of workers (e.g. wage level
48 These authors report that, in OECD countries, publicly financed paid maternity leave is available in all countries
except the US; the average duration of paid leave (in terms of the full-time-equivalent salary) is 27 weeks.
49 There is scarce evidence looking at the combined impact of paid parental leave and childcare subsidies on
women’s labour market outcomes in the long run. Recent work by Kleven et al. (2021) suggests that it may
not reduce the so-called child penalty, and that is there is no positive effect on women’s work outcomes after
having children.
and skills) and couples (the extent of egalitarian
views and preferences for job specialisation) are
significant and relevant in accounting for different
results across countries.49
3.2.5 In-kind education and health
transfers
Gaps in education access have reduced over
time across countries, and attainment levels
and years of education enjoyed by women
on average are higher than for men. There is
no disadvantage in health benefit access for
women in HICs. The demand for health services
is u-shaped over a lifetime, often highest at birth
and infancy and then in final years. This means that
gendered differences in demand can arise from
both birth and longer life expectancy. Kochhar
et al. (2016) report that spending on health and
education was already equalised across genders
in HICs. In fact, women benefited from tertiary
education more than men, and from health
provision because women live longer on average.
Aziz et al. (2016) show that, in New Zealand,
women benefit from in-kind expenditure to a
greater extent than men up to their mid-40s,
potentially linked to maternity health services
and retraining during their child-rearing years. As
with most other incidence studies, benefits are
assigned to individuals using the cost of provision,
which does not take into account service quality
or differential valuation across individuals.
Gender inequalities in health access and
enrolment across education levels beyond
primary and educational attainment persist

34 ODI Report
in LICs and in the MENA region. Inequalities
are more pronounced at higher levels of
education, for poorer families and in poorer
countries. Empirical studies from non-HICs on
who benefits from in-kind education and health
transfers show that girls tend to benefit less than
boys from the former, though the results for
health are mixed depending on the type of health
service and position in the income distribution.
Kochhar et al. (2016) provide a good survey of the
evidence. Demery et al. (1995), using econometric
techniques combined with household-level
survey data from Ghana, look at the incidence of
health and education in-kind transfers. They find
that girls benefit less than boys from education;
women benefit similarly from outpatient services,
but inpatient services benefit proportionally more
women in higher-income deciles, while women in
lower deciles have relatively poor access. Austen
et al. (2013) find that in Timor-Leste boys benefit
more from public spending on education, and that
educating girls is likely to influence the enrolment
of their children in education once they become
mothers. Filmer (1999) finds that girls have lower
school enrolment rates than boys, with the gap
higher for girls in poorer households, using data
from 41 countries. Glick et al. (2004), using data
from the Middle East, North Africa and SSA,
Latin America and Southeast Asia, find that the
distribution of education expenditure favours
boys. Medical visits tend to favour women during
childbearing years but appear to be gender neutral
outside this period, as do vaccination services.
Studies on the impact of increased access to
education on women’s employment outcomes
suggest that this is positive. Kochhar et al.
(2016), Fabrizio et al. (2020) and other sources
focusing on the macroeconomic returns to
investing in education and health to close the
gender gap in employment outcomes in non-
HICs highlight high returns, as described in
the introduction to this report. Evidence from
HICs suggests that progress in reducing gender
employment gaps has been brought about
through improvements in women’s educational
outcomes (Andrew et al., 2021).

35 ODI Report
4 Emerging policy lessons and
conclusions
Although a larger and more context-specific
body of evidence is needed to inform policy
design, from the discussion in this report
it is clear that certain fiscal policies may
affect gender inequalities in income and
opportunities in different directions. Policies
to narrow gender gaps, such as investment in
education, health and infrastructure, can be
particularly effective in LICs. In-kind transfers
in education and health can alleviate income
inequality by redistributing resources and
changing employment outcomes, and spending
on infrastructure can increase women’s well-
being and the opportunity costs of studying and
employment. Improving the progressivity of
the tax-benefit system, addressing disincentives
for second earners, child/elderly care, parental
leave and flexible work arrangements can all be
impactful across countries with different levels of
income or development.
The evidence base on the impact of tax and
transfers on gender income inequality and
poverty gaps in LMICs is extremely limited.
More context-specific evidence on the cost-
benefit assessment of alternative policy
options will be needed to better design fiscal
policies that foster gender economic equality.
There is an urgent need for further analysis
using sex-disaggregated data to understand
better the gendered impact of tax and transfers
policies in LMICs. Policy choices should be based
on cost-benefit analysis of alternatives. Should
governments provide targeted cash transfers or
subsidised childcare to help mothers balance care
and paid work responsibilities and achieve gender
income equality in LICs? Should these policies be
targeted, and if so how?
There is some evidence from (mostly
European) HICs that combined direct taxes
and cash transfers (contributory and non-
contributory) can reduce inequality between
genders. Contributory cash transfers linked to
labour market histories (e.g. pensions) are usually
less redistributive between genders (and can
magnify gaps) given that women contribute for
shorter periods due to their lower participation
in the labour market after having children, and
higher probability of having informal jobs.
Eliminating explicit biases against women in
tax systems is recommended, but the case for
favouring women explicitly in tax systems is
debatable. Other ways of addressing implicit
biases seem more promising. The case for a
gender-based tax system that provides lower
marginal tax rates for married women has been
discussed in Alessina et al. (2011). As discussed
by Coehlo et al. (2022), the conceptual case
could be made on several rationales, including
the (perceived) higher cost of hiring women
or higher elasticity of women’s labour supply.
However, even if rationalised from an economic
point of view, it may only generate a nominal
shift of income towards the lower rate spouse
within a household, without changing the actual
employment outcomes of women (Grown and
Vadiola, 2010). Berg (2023) argues that horizontal
equity considerations (that is, horizontal
discrimination) may deter governments from
using the tax system to reduce gender gaps,

36 ODI Report
even if women’s and men’s income distribution
is different, including women earning less on
average than men.
When looking at the impact of fiscal policies
on gender income or employment gaps, it is
important to consider the system as a whole,
and how to best target the most vulnerable
including lower-income women. Some
measures, such as introducing or broadening the
base for VAT or removing fuel subsidies, with the
objective of raising revenue in an efficient way and
minimising environmentally damaging behaviour,
can widen gender disparities or disadvantage
lower-income households and individuals. As is
the case when considering inequalities across the
income distribution, it is important to assess the
cost-benefit of alternatives that recycle revenue
from tax reforms to mitigate negative impacts on
the most vulnerable sections of the population.
It is essential to consider policy packages that
can mitigate undesired effects, for example
through targeted cash transfers and investment in
education and health. Indonesia, Ghana, Iran and
France provide helpful examples of countries that
have introduced such packages when reducing
subsidies to fossil fuels (UNDP, 2021).
Evidence shows that, in many HICs, women
are more likely to be poor than men, and in
other contexts household-level data shows
that women of reproductive age live in poorer
households. This has policy implications in
terms of addressing implicit biases. It is likely
that the policy implications from studies looking
at the combined impact of tax and transfers
(cash and in-kind) on vertical income inequality
(Granger et al., 2022) could be similar, to some
extent, to the lessons from the impact of the
tax-transfer system on gender income gaps.
That is, direct taxes and cash transfers and in-
kind transfers (education and health spending)
have the greatest equalising effect. In terms of
the policy implications, this means that having
progressive direct taxes, with progressive tax-
benefit systems overall, will likely reduce income
inequality between genders, given current
differences in the patterns of paid and unpaid
work and income levels of women and men.
There are important emerging lessons and
implications for the design of each policy tool,
even if studies are still few. These must be
considered within the system as a whole:
Direct taxes
• Remove any remaining explicit biases against
women.
• Improve progressivity of the system
– Ensure that the PIT rate structure, thresholds,
and definition of the tax base is progressive.
– Consider taxing different income sources at
the same rates, including capital income.
– Consider aligning CIT rates more closely to
PIT rates.
– Property taxes should take account of the
value of property to determine the base
and liquidity constraints to ensure they are
progressive.
• Reassess the design of tax expenditures that
affect the tax base for PIT and their impact on
gender income and employment inequalities.
In LICs, where most workers, and women more
so, have informal and low productivity jobs, tax
reliefs through the PIT will not be well targeted
towards gender equality or the most vulnerable
(Bastian et al., 2022).

37 ODI Report
• Improve work incentives of second earners
within the PIT. Remove elements of joint
taxation, including some tax credit elements,
so that second earners (usually women) do
not face such high tax rates when returning to
(formal) work.
Cash transfers
• Given current income and work patterns, non-
contributory transfers seem best suited to
reducing gender income gaps.
• Considering inclusivity and incentives combined
suggests that it is best to use a combination of
contributory and non-contributory transfers,
targeted at individuals (rather than family-based).
• Consider pension credits for adults caring for
children, the disabled or the elderly.
• Some countries aim to mitigate potential
negative effects of child/family-based cash
transfers on second earners’ work incentives by
rebalancing benefits between pre-school and
school-age children and linking them to labour
market participation.
Indirect taxes
• Use VAT to raise revenue to fund equivalising
spending. Avoid exemptions and reduced rates,
including on menstrual hygiene products and
childcare services. Use cash transfers targeted
to lower-income households or subsidised
products in lower-income areas, schools and
hospitals.
• Consider imposing excises on socially harmful
goods and compensate poorer households,
including poor women, if necessary.
• For tariffs: remove remaining explicit bias and
consider the gendered impact of tariff structure.
Indirect subsidies
• Consider reforming or directly removing
inefficient and pro-rich pro-men indirect
subsidies (e.g. on fossil fuels that are
proportionally consumed more by men than
women) and use measures such as cash
transfers to compensate vulnerable losers from
such reforms.
Family-based policies
• Subsidies to childcare and paid parental
leave can help encourage women with young
children to return to work. However, there is no
evidence as to impacts on gender income gaps
and evidence on the impact on employment
outcomes is inconclusive.
• Countries with relatively long periods of (paid )
parental leave could consider shortening this
to promote better career progression for main
carers and more equal lifetime earnings profiles.
Other policies that can help facilitate re-entry
to the labour market include providing greater
parity in maternity and paternity leave, including
earmarking leave for fathers.
• Subsidies to (quality) childcare services during
working hours seem to be a powerful tool to
lower the cost of returning to work, particularly
for women in lower- income households. If
resources are constrained, perhaps ensure that
subsidies are not being provided to higher-
income mothers already accessing quality
childcare and working.
In-kind transfers in education and health
• Focus should be placed on education and
health care for girls, especially in lower-income
households, in LICs. Ensure girls have equal
access to quality education throughout the
different levels and achieve similar levels of

38 ODI Report
attainment to boys, and minimise the risk of
girls dropping out of school. To achieve this,
complementary policies aimed at lowering the
opportunity costs of girls’ schooling (safety risks,
early marriage, child labour) may be necessary.
It is important to promote assessment of
the indirect benefits of closing gender gaps
in income and economic opportunities on
economic growth. Closing gaps between men
and women and boys and girls is likely to yield
external benefits that go beyond the direct
beneficiaries in terms of economic growth in the
medium term. Developing more data sources
would facilitate this analysis.
Efforts to improve the collection and
sharing of survey and income data at the
individual level with gender identifiers
across countries is crucial. This would help
advance understanding of the impact of fiscal
policies on gender income and employment
gaps and how best to address them. The
long-standing lack of gender-disaggregated
data to analyse the impact of fiscal policies is
one reason why evidence is limited. Renewed
public and policy interest in the topic combined
with progress in data and methodology have
galvanised researchers’ efforts to look at these
issues. Several new initiatives are being launched
globally (the African Tax Administration Forum,
World Bank, IMF).
Generating systematic evidence from
different countries using consistent data and
methodologies to compare how the impact
between genders varies across countries is
crucial. Improvements in this area could replicate
efforts to produce cross-country evidence on
the impact of fiscal policy across the income
distribution (see Granger et al., 2022).
Similar to Granger et al. (2022), we conclude
that not all fiscal instruments have to
address gender income or employment gaps.
However, there is a need to understand the
main drivers of income inequality in order
to design context-specific solutions, while
considering reforms to fiscal policy as one
of several levers. Approaches that consider
reform of complementary policies are often
needed. The sources of gender income inequality
are complex and are affected not only by tax and
social spending, but also by social norms and other
legal rights. For example, family-friendly labour
market policies that lead to higher labour force
attachment and salaries for women will increase
the returns to women’s investment in education
– so women in future generations will be more
likely to invest in education, which will also help
narrow gender gaps in labour market outcomes.
Social and cultural norms remain at the heart
of family choices and the gender distribution of
labour. Achieving equality of opportunity requires
ensuring that the norms and stereotypes that
limit the choices available both to men and to
women change. It is difficult, but the evidence
shows that social norms, too, can be changed
(Andrew et al., 2021; Field et al., 2021). Fostering
a work culture that promotes and values flexible
work schedules across occupations and sectors
can increase opportunities for workers with caring
responsibilities (Goldin, 2021).

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