Sweden reached the 2007 OECD average level of female labor force participation
already in 1974. Before, but not after, 1971 the average tax rate facing the housewife was a
function of the income of her husband. By exploiting a rich register based data source I utilize
the exogenous variation provided by the individual tax reform to analyze the evolution of
female employment in Sweden in the beginning of the 1970’s. Simulations suggest that
employment among married women would have been 10 percentage points lower in 1975 if
the 1969 statutory income tax system still had been in place in 1975.

Key words: Female labor supply, income tax reforms