Economics at your fingertips  

Labor Supply of Japanese Married Women: Sensitivity Analysis and a New Estimate

Shingo Takahashi, Masumi Kawade () and Ryuta Kato ()

No EMS_2009_14, Working Papers from Research Institute, International University of Japan

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.

Keywords: Female labor supply; Spousal deduction; Social Security System; Non-linear budget constraint (search for similar items in EconPapers)
JEL-codes: J20 H24 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2009-08
References: Add references at CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed

Downloads: (external link) First version, 2009 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Working Papers from Research Institute, International University of Japan 777 Kokusai-cho, Minami Uonuma0-shi, Niigata 949-7277 JAPAN. Contact information at EDIRC.
Bibliographic data for series maintained by Kazumi Imai, Office of Academic Affairs ().

Page updated 2020-07-29
Handle: RePEc:iuj:wpaper:ems_2009_14