Estimating Frisch labor supply elasticity in Japan

Sachiko Kuroda, Isamu Yamamoto

Research output: Contribution to journalArticle

20 Citations (Scopus)

Abstract

Using Japanese data from the 1990s aggregated by prefecture, age group, and sex, we estimate Frisch labor supply elasticity, which has been seldom estimated in Japan. The change in labor supply can be decomposed into two labor-supply behaviors: extensive margin, indicating workers' entry and exit from the labor market; and intensive margin, indicating changes in hours of work in response to a wage change. Our estimates of the Frisch elasticity on the extensive and intensive margins combined are in the range of 0.2 to 0.7 for males, 1.3 to 1.5 for females, and 0.7 to 1.0 for both sexes. Our estimates of the Frisch elasticity on only the intensive margin are in the range of 0.1 to 0.2 for all three categories. These results suggest that extensive margin explains the bulk of labor-supply changes in Japan. As for the changes in the estimates of the Frisch elasticity in Japan from the 1990s, it has been either unchanged or in a declining trend on the extensive and intensive margins combined, either unchanged or in a slight rising trend on only the intensive margin, and in a declining trend on only the extensive margin. J. Japanese Int. Economies 22 (4) (2008) 566-585.

Original languageEnglish
Pages (from-to)566-585
Number of pages20
JournalJournal of The Japanese and International Economies
Volume22
Issue number4
DOIs
Publication statusPublished - 2008 Dec 1

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Keywords

  • Extensive margin
  • Frisch elasticity
  • Intensive margin
  • Labor supply

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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