Labor Supply Responses to the 1990s Japanese Tax Reforms

Publication Type

Conference Paper

Publication Date

8-2011

Abstract

See journal article version at: https://ink.library.smu.edu.sg/soe_research/1416/. 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-ofwork elasticity with respect to the net-of-tax rate is 0.8 for married women.

Keywords

labor supply elasticity, intertemporal labor supply, sampleselection correctionmodel, quasiexperiment, tax reform

Discipline

Asian Studies | Labor Economics

Research Areas

Applied Microeconomics

Publication

Labour Economics

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