Labor Supply Responses to the 1990s Japanese Tax Reforms

Author

Ken YAMADA, Singapore Management UniversityFollow

Publication Type

Working Paper

Version

publishedVersion

Publication Date

9-2010

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.

Keywords

labor supply elasticity, intertemporal labor supply, sample-selection correction model, quasi-experiment, tax reforms

Discipline

Asian Studies | Labor Economics

Research Areas

Applied Microeconomics

First Page

1

Last Page

27

Citation

YAMADA, Ken. Labor Supply Responses to the 1990s Japanese Tax Reforms. (2010). 1-27.
Available at: https://ink.library.smu.edu.sg/soe_research/1145

Copyright Owner and License

Authors

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.