The impact of tax reform in 2004 on the female labour supply in Japan

Kei Sakata, C. R. McKenzie

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In 2003, the Japanese Diet passed legislation to abolish part of the special deduction for spouses (Haigusha Tokubetsu Kojo) which would take effect in the 2004 tax year. This paper investigates the impact of this tax reform on female labour supply in Japan. A number of earlier studies have shown that married women are likely to adjust their labour supply in order for their husbands to become eligible to take advantage of this deduction. By using the first and second waves of the Keio Household Panel Survey (KHPS) collected in 2004 and 2005, this paper uses the difference-in-differences approach to examine whether there has been any change in the behaviour of female labour supply as a result of this tax reform. The empirical evidence indicates that the tax reform in 2004 had a negative and statistically significant impact on both the decision of female spouses to enter the labour market and on the number of hours they worked conditional on their participation in the labour market. In addition, the empirical evidence obtained does not support the Douglas-Arisawa Law.

Original languageEnglish
Title of host publicationMODSIM 2005 - International Congress on Modelling and Simulation
Subtitle of host publicationAdvances and Applications for Management and Decision Making, Proceedings
EditorsAndre Zerger, Robert M. Argent
PublisherModelling and Simulation Society of Australia and New Zealand Inc. (MSSANZ)
Pages1084-1091
Number of pages8
ISBN (Electronic)0975840029, 9780975840023
Publication statusPublished - 2020 Jan 1
Event2005 International Congress on Modelling and Simulation: Advances and Applications for Management and Decision Making, MODSIM 2005 - Melbourne, Australia
Duration: 2005 Dec 122005 Dec 15

Publication series

NameMODSIM 2005 - International Congress on Modelling and Simulation: Advances and Applications for Management and Decision Making, Proceedings

Conference

Conference2005 International Congress on Modelling and Simulation: Advances and Applications for Management and Decision Making, MODSIM 2005
CountryAustralia
CityMelbourne
Period05/12/1205/12/15

Keywords

  • Difference-in differences
  • Female labour supply
  • Policy reform
  • Program evaluation
  • Tax reform

ASJC Scopus subject areas

  • Modelling and Simulation

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  • Cite this

    Sakata, K., & McKenzie, C. R. (2020). The impact of tax reform in 2004 on the female labour supply in Japan. In A. Zerger, & R. M. Argent (Eds.), MODSIM 2005 - International Congress on Modelling and Simulation: Advances and Applications for Management and Decision Making, Proceedings (pp. 1084-1091). (MODSIM 2005 - International Congress on Modelling and Simulation: Advances and Applications for Management and Decision Making, Proceedings). Modelling and Simulation Society of Australia and New Zealand Inc. (MSSANZ).