[PDF][PDF] Women's labor supply and taxation: Analysis of the current situation using data

I Yokoyama, N Kodama - Public Policy Review, 2018 - researchgate.net
I Yokoyama, N Kodama
Public Policy Review, 2018researchgate.net
Regarding women's annual income distribution, annual income has declined for low-to
medium-income women but increased for high-income women over the past 25 years. It was
found that while the annual income decline for low-to medium-income women can be
explained by the increase in the number of part-time workers, the annual income increase
for high-income women can be explained by factors such as a rise in the level of academic
achievement and an increase in the length of tenure. Next, we introduce findings from …
Abstract
Regarding women’s annual income distribution, annual income has declined for low-to medium-income women but increased for high-income women over the past 25 years. It was found that while the annual income decline for low-to medium-income women can be explained by the increase in the number of part-time workers, the annual income increase for high-income women can be explained by factors such as a rise in the level of academic achievement and an increase in the length of tenure. Next, we introduce findings from Yokoyama (2015) that analyzed the effects of the partial abolition of the special spousal exemption on the labor supply of married women. According to Yokoyama (2015), the tax system revision in 2004 increased working hours and income for married women with low income. In contrast, some medium-to high-income wives with annual income of 1.03 million yen or higher, who were not directly affected by the tax system revision, decreased their incomes, in response to the upward trend of their husbands’ incomes during the same period, to the kink of the budget line (1.03 million yen), which became more conspicuous due to the tax system revision. Consequently, the tax system revision, which was intended to increase the labor supply of women, increased income for low-income women and reduced the income of some medium-to high-income women toward 1.03 million yen, thereby ironically making more conspicuous the distortion of the income distribution for married women in Japan that is observed around 1.03 million yen.
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