Child Benefit, Tax Allowances and Behavioural Responses: The Case of Japanese Reform, 2010–2011

24 Pages Posted: 5 Nov 2018

See all articles by Shun‐ichiro Bessho

Shun‐ichiro Bessho

Government of Bhutan - Ministry of Finance

Date Written: December 2018

Abstract

The reform of Japan's child benefit system in 2010 was followed by the abolition of the tax allowance for dependents in 2011. The present study uses micro‐level data from the Employment Status Survey and an estimation of a discrete‐choice model of labour supply to examine the effects of these reforms on the labour supply, after‐tax incomes and the utility of households. The results show that the reforms decreased the labour supply of parents and that the funds necessary to implement them were underestimated by 22% when this behavioural change was disregarded.

Suggested Citation

Bessho, Shun‐ichiro, Child Benefit, Tax Allowances and Behavioural Responses: The Case of Japanese Reform, 2010–2011 (December 2018). The Japanese Economic Review, Vol. 69, Issue 4, pp. 478-501, 2018. Available at SSRN: https://ssrn.com/abstract=3277606 or http://dx.doi.org/10.1111/jere.12171

Shun‐ichiro Bessho (Contact Author)

Government of Bhutan - Ministry of Finance

P.O Box:117
Thimphu
Bhutan

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