The Impact of Tax Reform in Japan on the Work-Hour and Income Distributions of Married Women (original) (raw)
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Journal of the Japanese and International Economies, 2014
This study explores the effects of spousal allowances (SAs) in the Japanese system of personal income taxes, using the micro-simulation method based on the discrete choice model of labor supply. Our simulations show that the complete abolishment of SAs would increase the average annual working hours of all wives by 1.6% only, which is smaller than previous findings in the Japanese literature. If we focus on households benefiting from SAs, the rate of increase in the wife's working hours is even smaller (.1%). In addition, one particular case of SA reduction leads to a decrease in the labor supply of wives. We argue that these unexpected results are due to our explicit consideration of the fixed cost of labor market participations, which has been previously ignored in the Japanese studies.
Spousal Tax Deduction, Social Security System and the Labor Supply of Japanese Married Women
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This paper evaluates one of the most drastic reforms of the Japanese public health insurance started in year 2006, by numerically examining the reform in an aging Japan in a dynamic context with overlapping generations within a computable general equilibrium framework. Our simulation results are as follows. First of all, an increase in the co-payment rate, which is one of the most prominent changes in the reform, would result in higher economic growth as well as higher welfare since it stimulates private savings. Secondly, an increasing trend of the future national medical expenditure can mainly be explained by an aging population, and an increase in the co-payment rate has little effect to squeeze the national medical expenditure in the future. Thirdly, the effect of a decrease in the national medical expenditure, which can possibly be induced by the improvement in efficiency in the public provision of medical services, the promotion of preventative medical services, or technologic...
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We analyze cross-sectional time-use diaries from the 2011 and 2016 Survey on Time Use and Leisure Activities (Shakai Seikatsu Kihon Chosa) to investigate the association between educational level and housework participation at different quantiles. Using the unconditional quantile regression method, we test whether education is associated with less time spent on housework as the previous research on highly educated people suggests. We find that this hypothesis stands only for non-married Japanese women. On the other hand, among married Japanese women, especially those without children in higher deciles of housework participation, are more likely to increase their participation in housework with the increase in their educational level. The results suggest that in Japan, the institute of marriage places higher expectations on women's housework participation on married women with higher levels of education.
Labour Supply and Taxes: New Estimates of the Responses of Wives to Husbands' Wages
SSRN Electronic Journal
Labour Supply and Taxes: New Estimates of the Responses of Wives to Husbands' Wages * In this paper, we estimate income-and substitution-labour supply and participation elasticities for Canadian married women using data from the Survey of Labour and Income Dynamics 1996-2005. We use the Canadian Tax and Credit Simulator (CTaCS) and detailed information on the structure of income at the household level to compute the marginal tax rates faced by each individual. We then use these marginal tax rates to compute net ownwage, spouse-wage, and non-labour income. We show how the magnitude of the estimated elasticities varies depending on whether net or gross wages and income are used in the estimation procedure, and quantify biases caused by using average instead of marginal tax rates. Finally, because marginal tax rates vary significantly over the sample, we use quantile regressions to compare elasticities at different points of the hours distribution. Overall, our results show that public policies now have, on average, less scope for influencing hours of work than 10 years ago. However, the quantile results show that wives working fewer hours per week are more sensitive to changes in their own or spouses' wages.
Journal of the Japanese and International Economies, 2012
This paper provides new evidence of consumers' reaction to an anticipated sizable change in income. Until FY2002, Japanese public employees received predictable large bonus payments three times a fiscal year (in June, December, and March), but the March bonus was abolished in FY2003. We compare the seasonal patterns of public employees' expenditure before and after the reform of the bonus payment schedule. Contrary to the prediction of the life cycle/permanent income hypothesis (LC/PIH), we find evidence that monthly patterns of household expenditure were significantly affected by the anticipated large change in income pattern. However, at closer inspection, this excess sensitivity of expenditure is observed only for expenditure subcategories of some durability, i.e., durables and semi-durables. Thus, while the LC/PIH does not appear to hold for expenditure (which we observe here), it may still hold for consumption. Key words: Life cycle/permanent income hypothesis; excess sensitivity; bonus payments; Family Income and Expenditure Survey; Japan. JEL Classification Codes: E21 † This paper forms part of our research at the Economic and Social Research Institute (ESRI) on household consumption and macroeconomic policies in Japan. We are grateful to the Ministry of Internal Affairs and Communications for providing the micro-data from the Family Income and Expenditure Survey (FIES). We would like to thank Orazio Attanasio, Richard Blundell, Fumio Hayashi, Yukinobu Kitamura, and Yasuyuki Sawada for their helpful comments at the International Conference on Consumption organized by the COE program at Hitotsubashi University. Special thanks go to Hidehiko Ichimura for his constructive comments at an ESRI seminar, and Ralph Paprzycki for his comprehensive English editing service. Finally, Hori gratefully acknowledges financial assistance from the Japan Society for the Promotion of Science (JSPS) (Grant-in-Aid for Scientific Research (A) 23243046: Micro-data based analyses on the economic behaviors of households and policy effectiveness in Japan).The views expressed in this paper are personal and do not represent those of any of the institutions we belong to.
Labor Supply of Japanese Married Women: Sensitivity Analysis and a New Estimate
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Taxation and Household Decisions: an Intertemporal Analysis∗
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How do different income taxation systems – for instance individual vs. joint – affect people’s decisions and welfare? We provide an answer to this question in three steps. We document that taxing married households jointly, as in the U.S., generates substantial disincentives for secondary earners to supply labor, and that secondary earners respond to these disincentives. Next, we develop a lifecycle model in which single and married individuals make decisions about labor supply, household production, human capital accumulation, consumption, savings, marriage, and divorce. We estimate the model using variation from past tax reforms in the U.S., as well as auxiliary time use and expenditure data. Lastly, we use the model to evaluate the effect on individual decisions and welfare of three tax systems: the standard joint taxation system currently adopted by the U.S.; the individual taxation system; a more general form of the standard joint system that allows for flexible dependence of t...
Estimates of average marginal tax rates on factor incomes in Japan
Journal of the Japanese and International Economies, 2011
Gunji, Hiroshi, and Miyazaki, Kenji-Estimates of average marginal tax rates on factor incomes in Japan In this paper, we estimate average marginal tax rates on factor incomes in Japan from 1963 to 2007. We adapt the method of D.H. Joines [Estimates of effective marginal tax rates on factor incomes. J. Bus. 54 (2), 191-226.] to the Japanese tax and social security system. Average marginal tax rates on labor incomes without social security premiums range from 14% to 21%, whereas the rates on incomes with social security have increased from 21% to 33%. Tax rates on capital incomes have fluctuated between 35% and 58%. We also compare our estimates with average tax rates and the wedges from business cycle accounting.
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