A Structural Estimation of the Effects of Spousal Tax Deduction and Social Security Systems on the Labor Supply of Japanese Married Women
AbstractJapanese spousal tax deduction and social security systems cause a non-convex piece-wise budget constraint for married women. Using a pooled sample from the Japanese Panel Survey of Consumers, we structurally estimated a labor supply model that explicitly takes into account the nonlinearity in the budget constraint. Our results suggest that the effects of spousal deduction and social security reforms on the labor supply of Japanese married women would be much smaller than what the past reduced form studies suggest. The reform to completely eliminate the spousal tax deduction would increase the population labor supply only by 0.7%, though the labor supply responses of the most affected workers would be nontrivial, with their desired hours worked increasing by as much as 4%. The policy reform to require all women to pay the social security premium regardless of their income level would have almost no effects on the population labor supply. Our results also suggest that lump-sum income transfer programs, such as the current child care support program, would have negligible effects on female labor supply unless the transfers are substantially large.
Download InfoIf 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.
Bibliographic InfoPaper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2010_08.
Length: 40 pages
Date of creation: Jun 2010
Date of revision:
Contact details of provider:
Postal: 777 Kokusai-cho, Minami Uonuma0-shi, Niigata 949-7277 JAPAN
Web page: http://www.iuj.ac.jp/research/
More information through EDIRC
Structural estimation; Non-convex budget set; Female labor supply; Spousal deduction; Social Security System;
Find related papers by JEL classification:
- J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
- H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
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.:
- Yukiko Abe, 2009. "The Effects Of The 1.03 Million Yen Ceiling In A Dynamic Labor Supply Model," Contemporary Economic Policy, Western Economic Association International, vol. 27(2), pages 147-163, 04.
- Hideo Akabayashi, 2006. "The labor supply of married women and spousal tax deductions in Japan—a structural estimation," Review of Economics of the Household, Springer, vol. 4(4), pages 349-378, December.
- Kuroda, Sachiko & Yamamoto, Isamu, 2008.
"Estimating Frisch labor supply elasticity in Japan,"
Journal of the Japanese and International Economies,
Elsevier, vol. 22(4), pages 566-585, December.
- Sachiko Kuroda & Isamu Yamamoto, 2007. "Estimating Frisch Labor Supply Elasticity in Japan," IMES Discussion Paper Series 07-E-05, Institute for Monetary and Economic Studies, Bank of Japan.
- Masaru Sasaki, 2002. "The Causal Effect of Family Structure on Labor Force Participation among Japanese Married Women," Journal of Human Resources, University of Wisconsin Press, vol. 37(2), pages 429-440.
- Burtless, Gary & Hausman, Jerry A, 1978.
"The Effect of Taxation on Labor Supply: Evaluating the Gary Negative Income Tax Experiments,"
Journal of Political Economy,
University of Chicago Press, vol. 86(6), pages 1103-30, December.
- G. Burtless & J. A. Hausman, 1977. "The Effect of Taxation on Labor Supply: Evaluating the Gary Negative Income Tax Experiment," Working papers 211, Massachusetts Institute of Technology (MIT), Department of Economics.
- Shun-ichiro Bessho & Masayoshi Hayashi, 2013. "ntensive Margins, Extensive Margins, and Spousal Allowances in the Japanes e System of Personal Income Taxes: A Discrete Choice Analysis," CIRJE F-Series CIRJE-F-912, CIRJE, Faculty of Economics, University of Tokyo.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kazumi Imai, Office of Academic Affairs).
If references are entirely missing, you can add them using this form.