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34. Suppose that the spouse of the primary earner in the household is considering joining the labor force. The spouse cares for two children and,
34. Suppose that the spouse of the primary earner in the household is considering joining the labor force. The spouse cares for two children and, if employed, would earn $20 per hour for 40 hours per week. The total cost of child care would be $10 per hour for 50 (not 40) hours per week. Assume that the marginal tax rate on work is 50%. Assume that child care is NOT tax deductible and that child care at home is NOT imputed and taxed. What is the after-tax, after- child care value of working per week?
a. -$100 b. $0
c. $150 d. $300
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