Could tax reform bring thousands of women into the Swiss workforce?

Several studies estimate that the reform could result in between 12,000 and 20,000 additional full-time equivalent jobs across the country. IMAGO/Westend61

Supporters of individual taxation argue that ending the current system of joint taxation for married couples would encourage many women to enter the Swiss labour market or to increase their working hours. The proposal will be put to a nationwide vote on March 8. Here's an overview of the main arguments and estimates.

Under the current system, married couples are taxed jointly. Their incomes are added together and taxed as a single unit. Because of tax progression, this can result in a higher tax burden than if each partner were taxed individually.

The current tax structure often affects the second earner, who is more likely to be a woman. Any additional income may be largely absorbed by higher taxes and childcare costs, making extra paid work financially unattractive.

What do individual taxation supporters want?

Supporters of individual taxation believe that removing the perceived tax disadvantage would allow more wives and mothers to take up paid employment or to increase their workloads.

While the precise effect uncertain, several studies estimate that the reform could result in between 12,000 and 20,000 additional full-time equivalent jobs across the country.

The most recent analysis (IWP, Brandt, 2025)External link estimates around 16,000 additional full-time equivalent positions. This combines 15,000 people entering the labour market for the first time with increased workloads among those already working part time.

Earlier studies commissioned by Ecoplan (2019)External link and by the Swiss economic ministry (2022)External link reach similar conclusions. All studies attribute most of the potential increase to women, as they are more likely to work part time or not at all.

The underlying assumption is that lower taxation increases the financial return on work. Economic theory suggests that people respond by working more because more of their income remains after tax. The exact size of this effect varies depending on assumptions, which explains the differences between estimates. What matters most, however, is the order of magnitude, which is broadly consistent across studies.

Money or time?

A counter-argument is that people who need to work fewer hours to maintain the same income might instead choose more free time or take on unpaid care work. All studies nevertheless conclude that, on balance, tax cuts tend to increase labour supply.

Whether this will continue to hold true in the future is uncertain. Recent trends suggest that many people increasingly prioritise time over income, particularly where wages are already high.

Is work potential exhausted?

Female labour force participation in Switzerland (80%) is already high by international standards. Combined with comparatively high wages, this allows many households to opt for part-time work. The strong and persistent part-time trend reflects this preference.

Are there enough suitable jobs?

Any additional labour supply would also need to be absorbed by the labour market. This depends on factors such as qualifications, labour demand, company structures and the broader economic climate.

How big is the effect?

Individual taxation at federal level would likely encourage greater labour market participation among women. How large the effect would be remains uncertain. An increase of 10,000 to 20,000 jobs in a labour market of around 4.5 million positions would be significant, but it would not fundamentally transform Switzerland’s labour market.

Translated from German using AI/amva/sb

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