Discussion Papers

Intensive and Extensive Margins of Japanese Male and Female Workers - Evidence from the Tax Policy Reform in Japan-

DP Number DP-2015-006
Language 英語のみ
Date December, 2015
Author Yusuke Inoue
JEL Classification codes
Keywords Taxes, Japanese Male Labor Supply, Lifecycle-Consistent Fixed Effects model, Selection, and Endogeneity
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Using the annual micro panel data of Keio Household Panel Survey, I estimated labor
supply models to identify the intensive and extensive margins of Japanese male and
female workers. My empirical results contradict earlier studies which finds large
intensive margin of male workers. The findings are while, for all male workers, hours
worked elasticity and labor force participation elasticity are quite small (0.009 and
0.0025 respectively), extensive margin of non-regular workers shows big sensitive
response (0.365). On the other hand, intensive margins of both workers are small
against wage changes. The investigation by separating age groups (over 55 and under
54) shows that the sensitive labor participation response is caused by elderly
non-regular male workers. Furthermore, the comparison between male and female
labor supply responses ensure that both margins of male are much smaller than those
of females. The result also reveal interesting feature of female work behavior that the
intensive margin of female regular workers is as small as that of male.