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Press Release

Cleveland Fed Research Explores How Tax Policy, Design of Social Security Benefits, and Cost of Childcare Limit Female Labor Supply

The joint taxation of married couples, the linkage of Social Security retirement income to a spouse’s benefits, and the expense of childcare disproportionately affect women and hinder their participation in the US labor force, according to a review of research by Federal Reserve Bank of Cleveland economist Lara Loewenstein.

“Women married to men typically earn less than their spouses and generally provide more of the care for their young children. These sociological facts in concert with the high marginal tax rates imposed on women by how the United States taxes married couples, how Social Security benefits are designed, and the expense of childcare create incentives for women not to work,” Loewenstein writes in "Increasing the (Female) Labor Supply."

While the structure of these tax and retirement benefit policies aim to promote fairness, “any program that creates a disincentive to work should have that cost weighed against that program’s benefits,” she writes. “Hopefully, future research will help us better understand the cost and benefits of the fiscal policies highlighted in this Commentary.”

Read the Economic Commentary: Increasing the (Female) Labor Supply

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.218.1892