Template-type: ReDIF-Paper 1.0
Author-Name: Shingo Takahashi
Author-Name-First: Shingo
Author-Name-Last: Takahashi
Author-Email: staka@iuj.ac.jp
Author-Workplace-Name: International University of Japan
Author-Workplace-Homepage: http://www.iuj.ac.jp/
Author-Name: Masumi Kawade
Author-Name-First: Masumi
Author-Name-Last: Kawade
Author-Workplace-Name: Niigata University
Author-Workplace-Homepage: http://www.niigata-u.ac.jp/
Author-Name: Ryuta Ray Kato
Author-Name-First: Ryuta
Author-Name-Last: Kato
Author-Email: kato@iuj.ac.jp
Author-Workplace-Name: International University of Japan
Author-Workplace-Homepage: http://www.iuj.ac.jp/
Title: Labor Supply of Japanese Married Women: Sensitivity Analysis and a New Estimate
Abstract: We conduct a comprehensive analysis of the existing literature on the labor supply of Japanese married women using the Japanese Panel Survey of Consumers. We first conduct a detailed sensitivity analysis of the estimates of the wage elasticity to various economic and statistical assumptions used in the past studies. We then provide a new estimate of the labor supply model that simultaneously controls for wage endogeneity, sample selection into labor force as well as the possibly endogenous selection between different segments of the non-linear and often discontinuous budget constraint in a joint maximum likelihood estimation. We reject the assumption of wage exogeneity. The wife's labor market experience appears to be a valid excluded instrument, which validates most of the model specifications in the prior literature. The assumption of no-sample selection bias is rejected. Our new estimate shows that there are notable differences in the labor supply behavior of women who choose different segments of the budget constraint. In particular, the wage elasticity of women who work within the 1.03 million yen ceiling is twice more negative (-1.28) than that of women whose income exceeds the 1.41 million yen ceiling (-0.60). The wage elasticity smaller than -1 for the former type of women suggests that they may be adjusting their hours of work so as to contain their income within the 1.03 million yen ceiling.
Classification-JEL: J20, H24
Length: 45 pages
Creation-Date: 2009-08
Number: EMS_2009_14
File-URL: https://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2009_14.pdf
File-Format: Application/pdf
File-Function: First version, 2009
File-Size: 1077KB
Keywords: Female labor supply, Spousal deduction, Social Security System, Non-linear budget constraint
Handle: RePEc:iuj:wpaper:EMS_2009_14