Advanced Search
MyIDEAS: Login

Estimating Frisch labor supply elasticity in Japan

Contents:

Author Info

  • Kuroda, Sachiko
  • Yamamoto, Isamu

Abstract

Using Japanese data from the 1990s aggregated by prefecture, age group, and sex, we estimate Frisch labor supply elasticity, which has been seldom estimated in Japan. The change in labor supply can be decomposed into two labor-supply behaviors: extensive margin, indicating workers' entry and exit from the labor market; and intensive margin, indicating changes in hours of work in response to a wage change. Our estimates of the Frisch elasticity on the extensive and intensive margins combined are in the range of 0.2 to 0.7 for males, 1.3 to 1.5 for females, and 0.7 to 1.0 for both sexes. Our estimates of the Frisch elasticity on only the intensive margin are in the range of 0.1 to 0.2 for all three categories. These results suggest that extensive margin explains the bulk of labor-supply changes in Japan. As for the changes in the estimates of the Frisch elasticity in Japan from the 1990s, it has been either unchanged or in a declining trend on the extensive and intensive margins combined, either unchanged or in a slight rising trend on only the intensive margin, and in a declining trend on only the extensive margin. J. Japanese Int. Economies 22 (4) (2008) 566-585.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6WMC-4SGD4PT-1/2/997c6efb32ac9483e76bdfa291644916
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 22 (2008)
Issue (Month): 4 (December)
Pages: 566-585

as in new window
Handle: RePEc:eee:jjieco:v:22:y:2008:i:4:p:566-585

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622903

Related research

Keywords: Labor supply Frisch elasticity Extensive margin Intensive margin;

Other versions of this item:

Find related papers by JEL classification:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Browning, Martin & Hansen, Lars Peter & Heckman, James J., 1999. "Micro data and general equilibrium models," Handbook of Macroeconomics, in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 8, pages 543-633 Elsevier.
  2. Domeij, David & Floden, Martin, 2001. "The labor-supply elasticity and borrowing constraints: Why estimates are biased," Working Paper Series in Economics and Finance 480, Stockholm School of Economics.
  3. John C. Ham & Kevin T. Reilly, 2002. "Testing Intertemporal Substitution, Implicit Contracts, and Hours Restriction Models of the Labor Market Using Micro Data," American Economic Review, American Economic Association, vol. 92(4), pages 905-927, September.
  4. Heckman, James J, 1978. "A Partial Survey of Recent Research on the Labor Supply of Women," American Economic Review, American Economic Association, vol. 68(2), pages 200-207, May.
  5. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-21, May.
  6. Richard Blundell & Thomas MaCurdy, 1998. "Labour supply: a review of alternative approaches," IFS Working Papers W98/18, Institute for Fiscal Studies.
  7. Gary Hansen, 2010. "Indivisible Labor and the Business Cycle," Levine's Working Paper Archive 233, David K. Levine.
  8. Mulligan Casey B, 2001. "Aggregate Implications of Indivisible Labor," The B.E. Journal of Macroeconomics, De Gruyter, vol. 1(1), pages 1-35, April.
  9. Fumio Hayashi & Edward C. Prescott, 2000. "The 1990s in Japan: a lost decade," Working Papers 607, Federal Reserve Bank of Minneapolis.
  10. Julio J. Rotemberg & Michael Woodford, 1998. "An Optimization-Based Econometric Framework for the Evaluation of Monetary Policy: Expanded Version," NBER Technical Working Papers 0233, National Bureau of Economic Research, Inc.
  11. Ham, John C, 1986. "Testing Whether Unemployment Represents Intertemporal Labour Supply Behaviour," Review of Economic Studies, Wiley Blackwell, vol. 53(4), pages 559-78, August.
  12. Robert G. King & Sergio T. Rebelo, 2000. "Resuscitating Real Business Cycles," NBER Working Papers 7534, National Bureau of Economic Research, Inc.
  13. Richard Rogerson, 2010. "Indivisible Labor, Lotteries and Equilibrium," Levine's Working Paper Archive 250, David K. Levine.
  14. Prescott, Edward C., 1986. "Theory ahead of business-cycle measurement," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 25(1), pages 11-44, January.
  15. Browning, Martin & Deaton, Angus & Irish, Margaret, 1985. "A Profitable Approach to Labor Supply and Commodity Demands over the Life-Cycle," Econometrica, Econometric Society, vol. 53(3), pages 503-43, May.
  16. Casey B. Mulligan, 1998. "Substitution over Time: Another Look at Life Cycle Labor Supply," NBER Working Papers 6585, National Bureau of Economic Research, Inc.
  17. Kuroda, Sachiko & Yamamoto, Isamu, 2005. "Wage Fluctuations in Japan after the Bursting of the Bubble Economy: Downward Nominal Wage Rigidity, Payroll, and the Unemployment Rate," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 23(2), pages 1-29, May.
  18. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters, in: A Theory of the Consumption Function, pages 1-6 National Bureau of Economic Research, Inc.
  19. MaCurdy, Thomas E, 1981. "An Empirical Model of Labor Supply in a Life-Cycle Setting," Journal of Political Economy, University of Chicago Press, vol. 89(6), pages 1059-85, December.
  20. Mankiw, N Gregory & Rotemberg, Julio J & Summers, Lawrence H, 1985. "Intertemporal Substitution in Macroeconomics," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 225-51, February.
  21. Osano, Hiroshi & Inoue, Tohru, 1991. "Testing between Competing Models of Real Business Cycles," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 32(3), pages 669-88, August.
  22. Lucas, Robert E, Jr & Rapping, Leonard A, 1969. "Real Wages, Employment, and Inflation," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 721-54, Sept./Oct.
  23. Altonji, Joseph G, 1982. "The Intertemporal Substitution Model of Labour Market Fluctuations: An Empirical Analysis," Review of Economic Studies, Wiley Blackwell, vol. 49(5), pages 783-824, Special I.
  24. Fumio Hayashi & Edward C. Prescott, 2002. "Data Appendix to The 1990s in Japan: A Lost Decade," Technical Appendices hayashi02, Review of Economic Dynamics.
  25. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Muto, Ichiro & Shintani, Kohei, 2014. "An Empirical Study on the New Keynesian Wage Phillips Curve: Japan and the US," MPRA Paper 53934, University Library of Munich, Germany.
  2. Juan David Prada Sarmiento & Luis Eduardo Rojas Dueñas Author- Email: lrojasdu@banrep.gov.co, . "La elasticidad de Frisch y la transmisión de la política monetaria en Colombia," Borradores de Economia 555, Banco de la Republica de Colombia.
  3. Abe, Yukiko & Tamada, Keiko, 2010. "Regional patterns of employment changes of less-educated men in Japan: 1990-2007," Japan and the World Economy, Elsevier, vol. 22(2), pages 69-79, March.
  4. Yamada, Tomoaki, 2012. "Income risk, macroeconomic and demographic change, and economic inequality in Japan," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 63-84.
  5. Bessho, Shun-ichiro & Hayashi, Masayoshi, 2011. "Labor supply response and preferences specification: Estimates for prime-age males in Japan," Journal of Asian Economics, Elsevier, vol. 22(5), pages 398-411, October.
  6. Luisito Bertinelli & Olivier Cardi & Partha Sen, 2012. "Deregulation Shock In Product Market And Unemployment," Working papers 221, Centre for Development Economics, Delhi School of Economics.
  7. Toshihiro Ihori & Ryuta Ray Kato & Masumi Kawade & Shun-ichiro Bessho, 2009. "Spousal Tax Deduction, Social Security System and the Labor Supply of Japanese Married Women," Working Papers EMS_2009_15, Research Institute, International University of Japan.
  8. Shingo Takahashi, 2010. "A Structural Estimation of the Effects of Spousal Tax Deduction and Social Security Systems on the Labor Supply of Japanese Married Women," Working Papers EMS_2010_08, Research Institute, International University of Japan.
  9. Miguel Sánchez Romero & Naohiro Ogawa & Rikiya Matsukura, 2013. "To give or not to give: bequest estimate and wealth impact based on a CGE model with realistic demography in Japan," MPIDR Working Papers WP-2013-012, Max Planck Institute for Demographic Research, Rostock, Germany.
  10. Yue ZHAO, 2013. "Role of Financial and Productivity Shocks in the US and Japan: A Two-Country Economy," KIER Working Papers 881, Kyoto University, Institute of Economic Research.
  11. González, Roberto & Sala, Hector, 2011. "The Frisch Elasticity in the Mercosur Countries: A Pseudo-Panel Approach," IZA Discussion Papers 5993, Institute for the Study of Labor (IZA).
  12. Ryuta Ray Kato & Hiroaki Miyamoto, 2012. "Fiscal Stimulus and Labor Market Dynamics in Japan," Working Papers EMS_2012_19, Research Institute, International University of Japan.
  13. Kuroda, Sachiko & Yamamoto, Isamu, 2013. "Firms’ demand for work hours: Evidence from matched firm-worker data in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 29(C), pages 57-73.
  14. KURODA Sachiko & YAMAMOTO Isamu, 2011. "Firm's demand for work hours: Evidence from multi-country and matched firm-worker data," Discussion papers 11024, Research Institute of Economy, Trade and Industry (RIETI).
  15. Abe, Yukiko, 2012. "A cohort analysis of male labor supply in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 26(1), pages 23-43.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jjieco:v:22:y:2008:i:4:p:566-585. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.