TAX EXPENDITURES AND FEMALE LABOUR FORCE PARTICIPATION

The gender gap in labour force participation (LFP) has been a long-standing issue worldwide. On average, female LFP is currently 25 percentage points below men’s. The impact of the COVID - 19 pandemic has widened the gap since women have been hit harder by the crisis. Policy makers often use a myriad of tax expenditures (TEs) to encourage women’s participation in the labour force. Yet, if ill-designed, TEs may be ineffective in reaching their stated goals, or may trigger undesired effects, including exacerbating income and gender inequality. G20 governments should increase their efforts to better design TEs to encourage female LFP, and should eliminate those that discourage it.

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