Volume 27, Number 3 (Summer) 1992
Beason, Richard. 1992. "Intertemporal Substitution and Labor Supply in Japan." Journal of Human Resources 27(3):511-533.
This paper considers whether Japanese labor market data are consistent with the intertemporal substitution hypothesis. The Japanese labor market data are first tested for broad conformity with the hypothesis using the methodology of Eshenfelter and Card (1082). The results from this analysis are encouraging. Next, the hypothesis is tested using the methodology of Altonji (1982). The results from this analysis are not generally favorable to the hypothesis. Finally, and ad hoc test of whether the bonus should be considered a form of wage payment is nested in the test of the intertemporal substitution hypothesis, with the result that the bonus does not appear to elicit the same labor supply behavior as the base wage.
The author is an assistant professor of economics at the University of Alberta in Edmonton. He would like to thank, without implicating them, David Aschauer, Phil Howrey, Roger Kormendi, Jeff Miron, Gary Saxonhouse, Gary Solon, and an anonymous referee for useful comments on earlier drafts of this paper. He also acknowledges benefits from the comments of seminar participants at the University of Michigan, the University of Windsor and the University of Alberta. The author takes all responsibility for errors. An earlier draft of this paper was presented at the annual meeting of the Canadian Economics Association in Quebec City, June 1989. Financial assistance from the Sanwa Bank Foundation is gratefully acknowledged. The data used in this article can be obtained beginning in December 1992 through December 1995 from the author at the following address: Department of Economics, 8-14 Tory Building, University of Alberta, Edmonton, Alberta,T6G 2H4, Canada.
© 2002 by the Board of Regents of the University of Wisconsin System
US ISSN 0022-166X