Child Benefit, Tax Allowances and Behavioural Responses: The Case of Japanese Reform, 2010–2011
24 Pages Posted: 5 Nov 2018
Date Written: December 2018
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: Suggested Citation