2009 Fiscal Year Final Research Report
Estimation of marginal cost of public funds
| Project/Area Number |
19730215
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Single-year Grants |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | Hitotsubashi University |
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Principal Investigator |
BESSHO Shunichiro Hitotsubashi University, 大学院・経済学研究科, 講師 (90436741)
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| Project Period (FY) |
2007 – 2009
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| Keywords | 厚生損失 / 所得税 / 労働供給 |
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| Research Abstract |
Marginal cost of public funds (MCPF) is an additional change of effective costs generated by one unit of additional tax revenue. I estimate labor supply elasticities of Japanese households and MCPF, using a large micro data from Employment Status Survey. The estimated uncompensated elasticities of labor supply are small (0.06-0.21), while the substitution and income effects are estimated rather large, compared with the literature. Based on these estimated parameters, I estimate a Japanese MCPF as 1.1 on average. In addition, optimal linear income tax systems are calculated.
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