The tax simulation studies in Japan have necessarily relied on arbitrary sets of preference parameters due to the paucity of the empirical estimates. Motivated by this state of the art, we estimate the labor supply function and preference parameters for Japanese prime-age males, allowing for the...

When the labour supply is elastic with respect to the net wage, labour income taxation generates economic distortion and welfare loss. The substitute effect is a key determinant of the magnitude of such deadweight loss; thus, evaluating the elasticity of the labour supply has broad and...

When he labor supply is elastic with respect to the net wage rate, labor income taxation generates economic distortion and welfare loss. The substitute effect is a key determinant of the magnitude of such deadweight loss; thus, evaluating the elasticity of the labor supply has broad and...

This paper operationalizes Dahlby's (1998) theoretical analysis on the social marginal cost of public funds (SMCF) with microdata on Japanese prime-age males. Our exercise, however, is more than an application. First, we derive the formula for the SMCF that differentiates every individual....

In this paper, we estimate labor responses of Japanese prime-age males by taking into consideration the Japanese income tax system and utilizing a large micro-data set. We employ three maximum likelihood methods: (i) a modified version of (Hausman, 1979) and (Hausman, 1981), which assumes a...

This paper evaluates the 1999 national income tax reform in Japan by comparing the social marginal costs of public funds (SMCFs) for changing the marginal tax rates in different income brackets before the reform occurred. To do so, we estimate the discrete choice model of labor supply using a...

　　 This study explores the effects of spousal allowances (SAs) in the Japanese system of personal income taxes, using the micro-simulation method based on the discrete choice model of labor supply. Our simulations show that the complete abolishment of SAs would increase the average...

We investigate the effects of marginal changes of marginal tax rates of Japanese income tax system, computing the social marginal costs of public funds (SMCF) generated by marginal increase in tax rates. We use large micro data sets on Japanese households, and estimate a structural discrete...

This study proposes a method to estimate the social marginal cost of public funds (SMCF) that utilizes household data. First, we recast the existing SMCF formula to highlight the role of individual marginal costs of public funds (IMCF) and their respective distributional weights. Second, we...

In this study, we recast the formula of the social marginal cost of public funds (SMCF) and highlight the role of what we call individual marginal costs of public funds (IMCF). After elaborating on aspects of distributional weights, we estimate the wage elasticity of labor supply and the IMCFs...