Intergenerational Conflict Over Consumption Tax Hike: Evidence from Japan

Ryosuke Okazawa () and Katsuya Takii

No 19E009, OSIPP Discussion Paper from Osaka School of International Public Policy, Osaka University

Abstract: This paper analyzes the determinants of voter preferences on consumption tax hike using an opinion survey of Japanese citizens. We find robust evidence that the older voter is more likely to support consumption tax hike. We also find that the most of inter-generational difference toward consumption tax policy is explained by the gap between citizens under sixty and over sixty. We investigate how individual economic environment changes in 60 years old as a result of mandatory retirement system and pension system and find that the hours of work do not change but their degree of dependence on the pension in household income increases at the age of 60. Utilizing these facts, we conjecture that individuals may realize the importance of consumption tax in order to save the value of their assets.

Keywords: Consumption Tax; Fiscal Consolidation; Pension; RDD (search for similar items in EconPapers)
JEL-codes: E6 H2 H31 H63 (search for similar items in EconPapers)
Pages: 62 pages
Date: 2019-09
New Economics Papers: this item is included in nep-age, nep-mac and nep-pbe
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Persistent link: https://EconPapers.repec.org/RePEc:osp:wpaper:19e009

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