Labor Supply Responses to the 1990s Japanese Tax Reforms

Labor Supply Responses to the 1990s Japanese Tax Reforms

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 pa...

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Bibliographic Details
Main Author: YAMADA, Ken
Format: text
Language:English
Published: Institutional Knowledge at Singapore Management University 2011
Subjects:
Labor supply elasticity
Intertemporal labor supply
Sample-selection correction model
Quasi-experiment
Tax reforms
Asian Studies
Labor Economics
Online Access:https://ink.library.smu.edu.sg/soe_research/1416
https://ink.library.smu.edu.sg/context/soe_research/article/2415/viewcontent/LaborSupply_JapaneseTaxReform_2011.pdf
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Institution: Singapore Management University
Language: English
Description
Summary: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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