The Effects of the 1.03 million yen Ceiling in a Dynamic Labor Supply Model

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Abstract

In this paper I examine the e ects of a means-tested transfer system in Japan (“1.03 million yen ceiling”) in a dynamic labor supply model with endogenous retirement. In Japan, married women have reason to limit their annual earnings to no more than 1.03 million yen in order to receive a number of benefits available to low-income wives, and in fact often choose to do so. In a dynamic model, the optimal labor supply schedule follows a pattern that is not seen in a static framework, which I call the “spillover e ect.” The paper also examines the properties of dynamic welfare cost of this ceiling.

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Details

  • CRID
    1050845763948271872
  • NII Article ID
    120005595710
  • ISSN
    14657287
    10743529
  • HANDLE
    2115/58492
  • Text Lang
    en
  • Article Type
    journal article
  • Data Source
    • IRDB
    • CiNii Articles
    • KAKEN

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