The Effects Of The 1.03 Million Yen Ceiling In A Dynamic Labor Supply Model
"In this paper I examine the effects of a means-tested transfer system in Japan ("1.03 million yen ceiling") in a dynamic labor supply model with endogenous retirement. In Japan, married women have reason to limit their annual earnings to no more than 1.03 million yen in order to receive a number of benefits available to low-income wives, and in fact often choose to do so. In a dynamic model, the optimal labor supply schedule follows a pattern that is not seen in a static framework, which I call the "spillover effect." The paper also examines the properties of dynamic welfare cost of this ceiling. "("JEL "J22, H24, H55) Copyright (c) 2008 Western Economic Association International.
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Volume (Year): 27 (2009)
Issue (Month): 2 (04)
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