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Labor Supply Responses to the 1990s Japanese Tax Reforms

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  • Ken Yamada

    () (School of Economics, Singapore Management University)

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

Paper provided by Singapore Management University, School of Economics in its series Working Papers with number 12-2009.

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Length: 27 pages
Date of creation: Oct 2009
Date of revision:
Publication status: Published in SMU Economics and Statistics Working Paper Series
Handle: RePEc:siu:wpaper:12-2009

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Keywords: Labor Supply Elasticity; Intertemporal Labor Supply Model; Sample-Selection Correction Model; Quasi-Experiment; Tax Reforms;

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References

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  1. Robert A. Moffitt & Mark Wilhelm, 1998. "Taxation and the Labor Supply: Decisions of the Affluent," NBER Working Papers 6621, National Bureau of Economic Research, Inc.
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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 11021, Research Institute of Economy, Trade and Industry (RIETI).

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