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Child Benefit, Tax Allowances and Behavioural Responses: The Case of Japanese Reform, 2010–2011

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  • Shun-ichiro Bessho

    (Ministry of Finance)

Abstract

The reform of Japan’s child benefit system in 2010 was followed by the abolition of the tax allowance for dependents in 2011. The present study uses micro-level data from the Employment Status Survey and an estimation of a discrete-choice model of labour supply to examine the effects of these reforms on the labour supply, after-tax incomes and the utility of households. The results show that the reforms decreased the labour supply of parents and that the funds necessary to implement them were underestimated by 22% when this behavioural change was disregarded.

Suggested Citation

  • Shun-ichiro Bessho, 2018. "Child Benefit, Tax Allowances and Behavioural Responses: The Case of Japanese Reform, 2010–2011," The Japanese Economic Review, Springer, vol. 69(4), pages 478-501, December.
  • Handle: RePEc:spr:jecrev:v:69:y:2018:i:4:d:10.1111_jere.12171
    DOI: 10.1111/jere.12171
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    Cited by:

    1. Asakawa, Shinsuke & Sasaki, Masaru, 2020. "Can Childcare Benefits Increase Maternal Employment? Evidence from Childcare Benefits Policy in Japan," IZA Discussion Papers 13589, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    J20; H24;

    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

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