The share of part-time employment in total employment has risen in most OECD countries
over the past decades. While this is often associated with increased female labour
force participation and the desire of many workers to achieve an improved work-life
balance, there has been a significant decline in the average earnings of part-time
workers relative to full-time workers, as well as an increase in involuntary part-time
employment in a number of countries. This paper presents a summary of the taxation
of part-time work in OECD countries. It includes new calculations of the effective
tax rates on part-time work including those for male and female part-time workers
and for different household types. These indicators provide an evidence base for policymakers
looking to understand the impact of the tax system on the choice of employment form.
The analysis shows that average tax rates for part-time workers are lower than those
applied to full-time workers in almost all OECD countries, reducing post-tax gender
wage gaps, although marginal tax rates are often higher for part-time workers. These
differences between the taxation of part-time and full-time workers are largely due
to differences in earnings levels, and therefore to the progressivity of countries’
tax systems, rather than to differences in the tax treatment applied to part-time
workers relative to full-time workers.