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Labor supply responses to the 1990s Japanese tax reforms

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  • Yamada, Ken

Abstract

The consumption-leisure choice model implies that an exogenous change in tax rates will induce a change in labor supply. This implication is expected to be important to labor supplied by secondary earners under a progressive tax system when spousal income alters effective marginal tax rates. This paper examines labor supply responses to the income tax changes associated with Japanese tax reforms during the 1990s. The results indicate that the hours-of-work elasticity with respect to the net-of-tax rate is 0.8 for married women.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 18 (2011)
Issue (Month): 4 (August)
Pages: 539-546

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Handle: RePEc:eee:labeco:v:18:y:2011:i:4:p:539-546

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Web page: http://www.elsevier.com/locate/labeco

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Keywords: Labor supply elasticity Intertemporal labor supply Sample-selection correction model Quasi-experiment Tax reforms;

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Cited by:
  1. ASANO Hirokatsu & ITO Takahiro & KAWAGUCHI Daiji, 2011. "Why Has the Fraction of Contingent Workers Increased? A case study of Japan," Discussion papers, Research Institute of Economy, Trade and Industry (RIETI) 11021, Research Institute of Economy, Trade and Industry (RIETI).

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