Minimum wages, spousal tax exemption,and the labor supply of married women in Japan
Gong Haojun

May 2024
Discussion Paper No. 2402

GRADUATE SCHOOL OF ECONOMICS
KOBE UNIVERSITYROKKO, KOBE, JAPANMinimum wages, spousal tax exemption, and the labor supply of
married women in Japan
Haojun Gong12

Abstract
Under Japan's spousal and spousal special exemption system, married women whose
husbands earn less than a certain annual income are eligible for the spousal exemption.
Additionally, the minimum wage is raised annually in Japan, and married women working as parttimers, who are vulnerable to the effects of minimum wage increases, may experience an increasein annual income if they do not adjust their working hours. Therefore, this study examines how
the interaction between the spousal exemption and minimum wage systems affects the labor
supply of married women engaged in part-time work using single women as a control group. This
study particularly examines, under Japan's spousal exemption and spousal special system before
2018, whether married women who worked with annual earnings of 1.05 million yen or less(where the amount of the spousal exemption begins to decrease) or 1.41 million yen per year
(where the exemption disappears) adjust their labor supply in response to an increase in theminimum wage. The results show that married women working with annual earnings lower than
1.05 million yen adjust their working hours more in response to the minimum wage increase thanmarried women working with annual earnings lower than 1.41 million yen. For married womenwhose annual earnings were 1.05 million yen or less in the previous year, an increase of one yen
in the minimum wage decreases their weekly work hours by 1.266 hours. The scale of adjustment
in work hours is larger for married women whose annual earnings are close to 1.05 million yen,particularly in the subgroup of 0.9 million yen or more. These findings are robust even whencontrolling for heterogeneity in the selection of annual income groups.
Keywords: minimum wage, spousal exemption system, work hours
JEL Classification：J38; J20; H24

1．

Introduction

In recent years, hourly wages for part-time workers have been rising because of labor shortages
and higher minimum wages. However, this wage increase did not trigger an increase in annual
1

Faculty of Economics, Kobe International University, 9-1-6 Koyocho-naka, Higashinada-ku,

Kobe, 658-0032, Japan. E-mail: gonghaojun0310@gmail.com
2
Research Fellow, Graduate School of Economics, Kobe University, 2-1 Rokkodai-cho, Nada-ku,
Kobe-City,Hyogo 657-8501, Japan.
1income due to their decreasing work hours. It is conceivable that under Japan’s singular spousal
exemption system, many married women working part-time may adjust their employment toqualify for tax exemption. This phenomenon shows how Japan’s minimum wage and spousal
exemption systems impact the work-hour supply choices of married women working part-time.
No prior study has examined how married women, especially married women working
part-time who are likely to be affected by the minimum wage, make labor supply choices underthese two systems. Existing studies have separately examined the impacts of the minimum wage
system on employment and the spousal exemption system on employment choices for married
women. Therefore, this study provides evidence for policymaking in an environment where labor
shortages in Japan will become increasingly severe.
First, regarding the impact of the minimum wage system on employment from a demandside, a growing number of studies in various countries have examined the impact of minimum
wage systems on work hours. When examining the short-term impact of minimum wages on labordemand, the cost of layoffs and substitution with other factors of production does not occur
immediately; thus, per capita work hours are more easily adjusted. The results of studies
examining the impact of minimum wages on work hours do not show a significant reduction inwork hours (Allegretto et al, 2011; Connolly, and Gregory, 2002; Dickens et al, 1999; Hyslop
and Stillman, 2007; Zavodny, 2000; Dickens et al., 2012). Machin et al. (2003) and Stewart and
Swaffield (2008) who analyzed the minimum wage impact in the U.K., and Neumark and William(2004) and Neumark and Nizalova (2007), who analyzed the impact of the U.S. minimum wage,
found that an increase in the minimum wage decreases work hours. More recent studies have also
reported the negative effects of a minimum wage on work hours (Kamińska and Lewandowski,
2015; Wong, 2017).
In Japan, three studies have focused on the effect of minimum wage on work hours.
Hguchi et al. (2011) examine the effect of the minimum wage on changes in average weekly work
hours, including overtime, using individual unit panel data from the Keio Househ old Panel Survey(KHPS) from 2004–2010, targeting male and female part-time workers aged 15 and older. No
significant effects were observed. Kawaguchi and Mori (2021) examine the effect of minimum
wages on the average work hours (including overtime hours) of men and women aged 16–19
using regional-level panel data from the Labor Force Survey and Basic Survey on Wage Structure
for the period 2006–2010. No statistically significant effect was observed on the work hours of
the group in question. Akesaka et al. (2017) aggregated individual data from the Basic Survey on
Employment Structure at five-year intervals since 1992 to a prefectural level to examine theimpact on work hours by gender; they find that the decrease in work hours is particularly large
for women. Few studies examine the impact of the minimum wage on employment from a labor
supply side.
2

A growing number of studies have examined the impact of the spousal exemption systemon the employment choices of married women. Under Japan’s spousal exemption system before
the 2018 revision, if the husband is a taxpayer, he is entitled to a spousal special exemption if his
wife’s annual earnings are 1.03 (1.41) million yen or less. The spousal special exemption
decreases when the amount exceeds 1.03 (1.41) million yen. There has been a debate on whether
this system hinders the labor supply of married women. Using inductive analysis methods, Abe
and Ohtake (1995), Oishi (2003), and Yokoyama (2018) point out that the spousal exemption
system inhibits the labor supply of married women. Akabayashi (2006), Takahashi (2010), Besshoand Hayashi (2014), and Adachi and Kaneda (2016) show that married women’s work hours will
increase if the spousal exemption is abolished. Examining the impact of abolishing exemptionsin 2004, Yokoyama (2018) finds that partial abolishment boosts the labor supply of low-earning
married women. Therefore, these studies show that married women in Japan adjust their labor
supply under the spousal exemption system.
In recent years, it is conceivable that when married women with low earnings engage inlabor supply behavior, they may increase their work hours in response to an increase in theminimum wage of at least 20 yen per hour, while simultaneously reducing their work hours tocontinue receiving spousal exemption. No existing research examines what happens to theemployment choices of married women under minimum wage and spousal exemption systems,
which have opposing effects on the labor supply of married women. Since married women who
work part-time have flexible work hours, clarifying the intersectional effects of the minimum
wage and spousal exemption systems have policy implications. In other words, it is necessary tofind out how women adjust their labor supply when faced with the choice of reducing their work
hours to continue to qualify for the spousal exemption or increasing their own work hours in
response to an increase in the minimum wage.
This study examines how the interaction between the spousal exemption and minimum
wage systems affects the labor supply of married women engaged in part-time work using panel
data from the Japan Panel Survey of Employment Dynamics. This study’s contribution is that it
examines the impact of the minimum wage on work hours from both the supply and demand sidesof the labor market. Furthermore, it focuses on the conflict between the minimum wage and the
spousal exemption system in Japan. First, we use first difference estimation to calculate how
married women in part-time with annual earnings below 1.05 (1.41) million yen ceiling who ispotentially applicable for spousal exemption adjust work hours. During this analysis, we use
single women with annual earnings over 1.05 (1.41) million yen as the control group to identify
the labor supply effects of minimum wage on married women applicable to spousal exemption.
Next, we control for heterogeneity probably brought by the selection of annual income groups tomake a robustness analysis. The results show that married women whose annual earnings in the3

previous year were less than 1.05 million yen significantly reduce their work hours in response to
an increase in the minimum wage. The scale of adjustment in work hours is larger for married
women whose annual earnings have a smaller distance to 1.05 million yen. These findings arerobust even when controlling for heterogeneity in the selection of different earning groups. Thissuggests that when the minimum wage is high, work hours are adjusted so that annual earnings
do not surpass 1.05 million yen to continue receiving spousal exemptions. This result supports
the possibility that the effect of a higher minimum wage on work hours includes not only an
adjustment of work hours on the demand side shown in previous studies but also a reduction inwork hours on the supply side. This suggests that the minimum wage and spousal exemption
systems in Japan have a conflicting impact on married women’s labor supply choices.
The remainder of this paper is organized as follows: Section 2 presents an overview ofthe minimum wage and spousal exemption systems; Section 3 constructs an empirical model toexamine the employment choices of married women in the interaction between the minimum
wage and spousal exemption systems; Section 4 describes the data used in this study; Section 5summarizes the estimation results; and, Section 6 provides a robustness check. Finally, Section 7
presents our conclusions.

2．

Institutional background

2.1 Minimum wage system

Japan’s Minimum Wage Act was passed in 1959. When determining the minimum wage amount,
the Central Minimum Wages Council separates Japan’s 47 prefectures into four ranks (A, B, C,
and D) based mainly on an index that synthesizes the total indicators of economic conditions ineach prefecture. Every year, it sets a rough level for an increase in minimum wages for each rank,which we refer to as the meyasu system. The current meyasu system for regional minimum wages
is guided by minimum wage indicators based on the economic conditions of each region. The
Local Minimum Wages Council in each prefecture determines the amount for the minimum wage
increase based on the meyasu set for the prefecture’s rank.
In 2007, the revision of the Minimum Wage Act conducted by the Japanese government
aims to increase the prefectural minimum wage due to the gap between the minimum wage andamount of public assistance. The government has since adjusted the range of minimum wage
increases to narrow the above gap in the corresponding region. Consequently, the hourly
minimum wage for each prefecture has increased annually by approximately 20 yen or morecompared with the previous increase of only one or two yen per hour. It is mandatory for all
businesses to comply with a minimum wage.
Two types of minimum wages exist in Japan. One is regional wage, which applies to all
workers in the corresponding prefecture. The other one is industrial wage, which only covers
4specific industries. Since regional minimum wages cover a wider range of workers than industrial
minimum wages to lead to a larger effect and all previous studies on minimum wages in Japan
have also used regional minimum wages, we use the regional minimum wage in our study. The
regional minimum wage in Japan is raised annually. As shown in Fig . 1, minimum wages
increased considerably after 2007, causing low-wage workers’ wages to increase considerably.
Moreover, it has also affected wage increases for workers up to the 30 th and 40th percentile of thewage distribution (Kambayashi et al., 2013; Kawaguchi and Mori, 2021).

Fig. 1 Minimum wage: national average and hourly wage (yen)Note: Data for national minimum wages, which are revised annually in October, are taken from the Ministry of Health, Labour and Welfare’s“Revision of Regional Minimum Wages” for the years 2001 through 2018. Source: Calculations based on the Overview of Minimum Wage
Determination (2000–2018).

2.2 The spousal and spousal special exemption system

A spousal special exemption system was established to reduce a taxpayer’s personal tax burden
by deducting a fixed amount from taxable earnings when the taxpayer’s spouse earns below acertain amount. In Japan, the husband is the head of the household as well as the taxpayer in mostcases. To simplify this study, we assume that the husband is the taxpayer. The structure of Japan’s
spousal exemption and spousal special exemption system is shown in Table 1. Regardless of thehusband’s annual earnings, if the spouse’s annual earnings do not exceed 1.03 million yen, thespousal exemption is applied, and an exemption of 0.38 million yen is applied to the husband’s
taxable earnings. When the wife’s annual earnings exceed 1.03 million yen, the spousal exemption
ceases to apply, and a special spousal exemption is applied. Only taxpayers earning below 1.22
million yen are eligible for this special spousal exemption. The spousal special exemption is avanishing exemption, as the amount decreases in accordance with the spouse’s earnings. If thewife’s annual earnings are below the 1.05 million yen threshold, the spousal special exemption of5

0.38 million yen is applied to the husband. The spousal special exemption decreases in stages
until annual earnings reach 1.41 million yen, and the special exemption ceases to apply once
annual earnings exceed 1.41 million yen. Thus, in effect, the total (sum of exemption and special
exemption) amount of the tax exemption applicable to the husband whose earnings are lower than
1.22 million yen decreases when the wife’s annual earning exceeds 1.05 million yen, and theamount of tax exemption becomes zero when it exceeds 1.41 million yen.
Table 1. Exemptions for spouses before 2018 (unit: 10,000 yen)

Exemptions for spouse (Unit: 10,000 yen)
Annual earnings

Exemption

Special exemption

Sum

~103
103-104.999…

38
0

0
38

38
38

105-109.999…

0

36

36

110-114.999…
115-119.999…

0
0

31
26

31
26

120-124.999…

0

21

21

125-129.999…
130-134.999…

0
0

16
11

16
11

135-139.999…
140-140.999…

0
0

6
3

6
3

141~

0

0

0

Note: Table 1 represents the number of spousal and special exemptions applicable to married women based on their annual earnings based on
Yokoyama (2018). This table assumes that taxpayers earn below 1.22 million yen.

Additionally, when a wife’s annual earnings are less than 1.03 million yen, she is not only
exempted from income tax but also often receives a spousal allowance from her employer, which
creates a ceiling of 1.03 million yen 3 (Abe, 2009). Therefore, married women who work parttime may adjust their work hours so that their annual earnings do not exceed 1.03 million yen.
Additionally, since annual earnings that exceed 1.3 million yen are not exempted from social
insurance, 1.3 million yen could be considered a factor that restrains female labor supply.
This study only focuses on the impact of the spousal exemption system on female labor
supply. Under the system before 2018, for a husband who is entitled to both a spousal exemption

The term of 1.03 million yen ceiling used in this paper follows Abe (2009), where the ceiling is theannual earnings threshold of 1.03 million yen that married women consider when they supply labor.
This is because married women who earn more than 1.03 million yen do not qualify for the spousal
exemption.
63

and a special spousal exemption, even if his wife’s annual earnings exceed 1.03 million yen but
not 1.05 million yen, a special spousal exemption of the same amount as the spousal exemption
is applied. This has resulted in a kink in the wife’s budget line at 1.05 million yen. Thus, the actual
threshold at which the amount of the spousal special exemptions begins to decrease is at the point
where annual earnings exceed 1.05 million yen. As mentioned previously, the spousal exemption
becomes zero when it exceeds 1.41 million yen; thus, 1.41 million yen is another threshold.
In recent years, the hourly minimum wage for each prefecture has increased annually byaround 20 yen. When these minimum wage increases lead to an increase in wages, workers havea theoretical incentive to work longer hours. In Japan, women and part-time workers are moresensitive to the impact on the minimum wage (Kawaguchi and Mori, 2009). In the case of married
women who work part-time and are subject to the spousal exemption, there may be a conflict
between the option to increase work hours in response to a minimum wage increase and the option
to decrease work hours to avoid being excluded from the spousal exemption. Therefore, clarifying
how married women make employment choices under these two systems that work against thelabor supply is relevant.
This study focuses on the conflict between the spousal exemption and minimum wage
systems. We examine whether married women who work part-time adjust their work hours so that
their annual earnings do not exceed 1.05 million yen or 1.41 million yen when the minimum wage
increases.

3．

Econometric model

In this section, we use the following model to clarify how women’s part-time work-hour decisions
are affected by the interaction between the spousal exemption system and minimum wage. Since
we assume potential eligibility for the special exemption for spouses, we restrict the sample ofmarried women to those whose husbands earn less than 12.2 million yen per annum, which is thecondition for applying for a spousal special exemption.
𝛥𝐻𝑜𝑢𝑟𝑠𝑖𝑗𝑡 = 𝛥𝑀𝑊𝑖𝑗𝑡 ( 𝛾4 + ∑2𝑘 =1 𝜑𝑘 𝐷𝑖𝑘𝑡 −1 + 𝛾5 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 + 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 × ∑2𝑘 =1 𝜇 𝑘 𝐷𝑖𝑘𝑡 −1 ) +𝛥𝑋𝑖𝑗𝑡 𝛽 ′ + ∑2𝑘=1 𝛾𝑘 𝐷𝑖𝑘𝑡 −1 + 𝛾3 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 + 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 × ∑2𝑘 =1 𝜀𝑘 𝐷𝑖𝑘𝑡 −1 + 𝑢 𝑖𝑗𝑡(1)

where i denotes individuals, j denotes prefectures, and t denotes year. 𝛥𝐻𝑜𝑢𝑟𝑠𝑖𝑗𝑡 is the difference
in women’s average weekly work hours. Among the explanatory variables, ∑2𝑘=1 𝜑𝑘 𝐷𝑖𝑘𝑡−1 are
two earnings dummies for the previous year, which include a woman’s earnings in the previous
year, less than 1.05 million yen and between 1.05 and 1.41 million yen, respectively, for which
the base group is women whose previous year’s earnings exceed 1.41 million yen. 𝑀𝑎𝑟𝑟𝑖𝑒𝑑𝑖 isa married dummy that takes the value of 1 if the woman is married and 0 otherwise. Under thecurrent spousal exemption system, the exemption amount begins to decrease when annual
7earnings are over 1.05 million yen and continues to decline until earnings reach 1.41 million yen.
The exemption disappears when annual earnings exceed 1.41 million yen. 𝑀𝑊𝑖𝑗𝑡 is the minimum
wage for the year in region j where individual i lives. The other control variable vector, 𝑋𝑖𝑗𝑡 ,includes age, a dummy for living with parents, previous year’s non-labor earnings, husband’s
earnings in the previous year, number of preschool children, occupation dummies, andunemployment rates. Following Takahashi (2010) and Yokoyama (2018), non -labor earnings,
husband’s income, and the number of preschool children may negatively impact the supply ofwork hours; therefore, the three variables are included in the control variables. 𝑢 𝑖𝑗𝑡 is the errorterm.
We identify the impact of the minimum wage on the determination of work hours ofmarried women covered by the spousal exemption system using 𝜇 𝑘 , a parameter of theintersection term of three variables: a marriage dummy variable, previous year’s earning dummies,
and minimum wage variables. In other words, 𝜇1 and 𝜇 2 are the parameters of interest in thisstudy. Married women with annual earnings of less than 1.41 million yen in the previous year
qualify for spousal exemption, and we use 𝜇1 and 𝜇 2 to identify the extent to which they reduce
their work hours when they face a wage increase associated with an increase in the minimum
wage.
We use 𝜇 𝑘 to identify the effect of the minimum wage on the supply of work hours ofmarried women covered by the spousal exemption system. This is because the Japan Panel Surveyof Employment Dynamics used in this study does not include questions that would allow us toascertain whether women are applying for or receiving a spousal exemption; however, likeprevious studies, we target women who potentially receive a spousal exemption based on theirannual earnings.
This study seeks to identify whether married women with annual earnings of less than
1.05 million yen in the previous year show an adjustment in work hours with an increase in theminimum wage. We consider single women as the control group. Additionally, as the effect of anincrease in the minimum wage on changes in work hours includes both demand- and supply-side
effects, we should identify impacts on labor supply that are distinguishable from impacts on labordemand.
First, we consider the demand. Here, we assume that the labor force of married and single
women is homogeneous, with other conditions held constant. Previous studies have shown thatan increase in the minimum wage may cause firms to adjust their costs by reducing the work
hours of low-wage workers. Specifically, low-wage earners earning less than 1.41 million yen peryear are more likely to experience a larger wage increase from an increase in minimum wage thanrelatively high-wage earners earning more than 1.41 million yen per year. Therefore, firms are
more likely to shorten low-wage earners’ work hours. Thus, the difference in demand for work8hours triggered by a change in the minimum wage in annual earnings group is controlled by using
single women in each earnings category as a control group.
Second, comparing single women with annual earnings of less than 1.41 million yen withthe group with annual earnings of more than 1.41 million yen in the previous year, the impact ofthe minimum wage on women’s supply of work hours appears to have a substitution effect rather
than an income effect on the wage increase associated with the minimum wage increase. Thus,
single women do not reduce their work hours. However, married women want to reduce theirworking hours to continue receiving spousal exemptions. Thus, the model allows us to control forthe demand-side effects and fixed effects by annual earnings group and 𝜇 𝑘, a parameter of theintersection term of three variables: a marriage dummy variable, previous year’s earning dummies,
and the minimum wage variables; it identifies the effect of the minimum wage on the supply ofwork hours of those who apply the spousal exemption system.

4．

Data

This study uses data drawn from the Japan Panel Survey of Employment Dynamics (hereafter
JPSED). The main target of the analysis is married women who work part-time. Since this survey
asks about employment status over a three-year period from 2015 to 2017, it will be used as panel
data for the same individual over that period. The advantage of this survey over other household
panel surveys in Japan is that it includes a larger sample of employed married women. Anotheradvantage is that the panel data allow us to obtain the previous year’s annual earnings of the same
individual.
Next, we describe the characteristics of the JPSED data, its background, and strengths
and limitations. We use JPSED data from 2016 to 2018. Since this survey investigates the situationin previous years, it captures the situation from 2015 to 2017. In 2018, Japan’s spousal exemption
system was revised regarding the annual earnings limit for receiving the exemption, whichchanged the treatment group when data from 2018 were used for identification; therefore, data up
to 2018 were used in the analysis. This panel survey is conducted annually in January by the
Recruit Works Research Institute using Internet monitors; moreover, it targets Japanese men andwomen aged 15 years and older nationwide. It contains questions on employment status, earnings,
and living conditions during the previous year. The most significant advantage of the JPSED is
its large sample size (approximately 50,000 individuals per year). However, its limitation is that
it is conducted online; thus, the occupations and characteristics of the respondents may differ fromthose of the general Japanese population.
Among the survey questions, we use the average weekly work hours of the main job held
as of December of the previous year and the annual earnings (including bonuses) from the main
job during the previous year. The occupational classifications used in this survey follow the Basic
9

Japanese Standard Classification of Occupations. Since the survey provides information on theresidential area of individuals, information on minimum wages and unemployment rates ismatched by residential area. Data for regional minimum wages, which are revised annually in
October, are taken from the Ministry of Health, Labour and Welfare’s “Revision of Regional
Minimum Wages” for the years 2014 through 2016. The annual average unemployment rate uses
data from the Labor Force Survey, Statistics Bureau, and Ministry of Internal Affairs andCommunications for 2015–2017.
As a sample restriction in the analysis, we exclude groups that receive public assistance.
The presence of a group receiving welfare includes the possibility that they adjust their work
hours in response to the minimum wage, making the effect of the spousal exemption system lesspure.
Table 2 summarizes the descriptive statistics of the sample of married and single womenused in the analysis. Compared with married women, single women work longer hours on averageand have slightly higher earnings and non-labor income. The age ranges are about the same. The
bottom part of Table 2 shows the sample sizes of married and single women by annual earnings
group. The sample size of married women is about 1.5 times larger than that of single women.
The sample of married women is dominated by a sample with annual earnings of less than 1.05
million yen, whereas that of single women is dominated by a sample with annual earnings of morethan 1.41 million yen. Figure 2 shows a histogram of the previous year’s annual earnings ofmarried women who work part-time. The red line indicates, from left to right, 1.05 and 1.41
million yen, respectively. Figure 2 shows that the annual earnings of married women who work
part-time spike around 1.05 million yen and 1.41 million yen, with the extent of the increase to
1.41 million yen being smaller than 1.05 million yen. The fact that the sample is not very large
around 1.41 million yen is consistent with Yokoyama (2018). It also shows that 1.03 million yen
is the upper limit of annual earnings for married women to obtain earning tax exemptions, spousal
exemptions, and spousal benefits for their husbands. However, this study focuses on the impactof the 1.05-million-yen ceiling, where the actual exemption begins to decline for married women
who are eligible for the spousal special exemption. The data used in this study also show that theannual earnings of married women increase to nearly 1.05 million yen. Since we do not observea kink at 1.3 million yen owing to the social insurance ceiling, we are interested in whether women10behave with an awareness of the kinks at 1.05 million yen, where the spousal exemption begins
to decrease, and at 1.41 million yen, where the exemption disappears completely.

Fig. 2 Histogram of the annual earnings of married women working part-time
Note: The red line represents 105,141 points from left to right. The sample comprises married women in the JPSED from 201 6 to 2018.

Table 2. Descriptive statistics
Married Women
Variables

Single Women

Obs

Mean

Std. Dev.

Min

Max

Obs

Mean

Std. Dev.

Min

Max

Weekly work hours

1,793

24.47

10.96

1

99

1,217

31.62

11.49

1

100

Minimum wage (yen)1,793

843.78

71.58

737

958

1,217

847.33

74.50

737

958

Last year's income (10,000 yen)

1,793

116.67

82.36

1

1000

1,217

161.36100.62

1

750

1,793

8.70

47.87

0

600

1,217

24.2

61.37

0

500

yen)

1,793

529.29237.19

150

1200

1,217

0

0

0

0

Age

1,793

49.22

9.26

21

78

1,217

44.49

13.40

19

77

Household non-labor income in previous year
(10,000 yen)
Husband's income in the previous year (10,000

Last year's income category

D1

427

639

D2

262

163

D3

1,104

415

Total

1,793

1,217

Note: D1 represents individuals whose earnings in the previous year were over 1.41 million yen. D2 represents individuals whose
earnings in the previous year were between 1.05 and 1.41 million yen. D3 represents individuals whose earnings in the previous
year were below 1.05 million yen.

11

Figure 3 plots the relationship between the minimum wage and work hours for married
women with annual earnings less than and more than 1.41 million yen in the previous year. The
slope of the graph for married women with annual earnings more than 1.41 million yen is more
upward, whereas that of the graph for married women with annual earnings less than 1.41 million
yen is downward.
This indicates that the response of working hours to the minimum wage differs dependingon the marital status of female part-time workers whose annual earnings are less than 1.41 million
yen. This finding suggests that the group potentially eligible for spousal exemption in the previous
year may have adjusted their work hours in response to an increase in the minimum wage.

(a)

(b)
Fig 3. Plot of minimum wage and work hours for married women working part-time
Note: Panel (a) represents a sample of married women with annual earnings more than 1.41 million yen, and Panel (b) represents asample of married women with annual earnings less than 1.41 million yen. The horizontal axis represents the minimum wage, and thevertical axis represents the weekly work hours.

12

5．

Empirical results

Table 3 summarizes the estimation results. In Table 3, the control variables are added from left toright; since the column on the far right contains all the control variables, we explore the results
here. The variables of interest are an intersection term consisting of three variables: a dummy forannual earnings of 1.05 million or less in the previous, a married dummy, and the minimum wage;
moreover, there is an intersection term consisting of three variables: a 1.05–1.41-million-yen
dummy, a married dummy, and the minimum wage. Both the coefficients of the two intersection
terms are negative, but statistically significant in the case of the intersection term for annual
earnings of 1.05 million yen or less in the previous year. For married women with annual earningsof less than 1.05 million yen, the coefficients indicate that an increase in minimum wage in thecurrent year leads to a statistically significant decrease in work hours. The coefficient value
indicates that for married women whose annual earnings were 1.05 million yen or less in theprevious year, an increase of one yen in the minimum wage decreases their weekly work hours
by 1.266 hours. Using the average values of minimum wage and weekly work hours presented in
the descriptive statistics, we find that, since the minimum wage increases by 8 yen on averageeach year, married women who are potentially eligible for the spousal exemption reduce theirweekly work hours by 10.128. This result is robust regardless of whether the year dummies or all
the control variables are included. Therefore, married women adjust their work hours in responseto the 1.05 million yen ceiling owing to the increase in the minimum wage under the spousal
exemption system, while not responding to the 1.41 million yen ceiling. In the descriptive
statistics, married women’s annual earnings distribution also supports this result as they are notconcentrated in the range of 1.05–1.41 million yen.

13

Table 3．First difference estimation: Effect of minimum wage increases on married women’s workhour supply under the spousal exemption.
First difference estimation
(1)
0.967
(14.852)-11.134(11.433)-19.528(12.759)(2)
1.129(14.860)-10.962(11.445)-19.222(12.811)(3)
1.128(14.863)-10.979(11.455)-19.243(12.810)(4)
1.036(14.872)-10.925(11.452)-19.238(12.784)(5)
1.001(14.873)-10.772(11.454)-19.480(12.783)(6)
0.979(14.877)-10.795(11.468)-19.451(12.781)25.163(20.567)

24.916(20.593)

24.916(20.597)25.140(20.635)

25.239(20.637)

25.245(20.639)31.733*(17.093)
0.184(0.208)31.369*(17.136)
0.191(0.209)31.484*(17.158)
0.191(0.209)31.449*(17.135)
0.193(0.208)31.566*(17.137)
0.193(0.208)31.592*(17.149)
0.195(0.208)-0.012(0.596)0.493(0.463)0.772(0.504)-0.018(0.596)0.486(0.463)0.760(0.506)-0.018(0.597)0.487(0.464)0.761(0.506)-0.015(0.597)0.485(0.464)0.761(0.505)-0.013(0.597)0.478(0.464)0.770(0.505)-0.012(0.597)0.479(0.464)0.769(0.505)

D2×Marriage dummy×ΔMinimum wage

-0.982(0.823)-0.972(0.824)-0.972(0.824)-0.981(0.826)-0.985(0.826)-0.986(0.826)

D3×Marriage dummy×ΔMinimum wage

-1.271*(0.683)-1.257*(0.685)-1.261*(0.686)-1.259*(0.685)-1.265*(0.685)-1.266*(0.685)

ΔAge

NO

YES

YES

YES

YES

YES

ΔNon-labor income

NO

NO

YES

YES

YES

YES

ΔHusband’s

income

NO

NO

NO

YES

YES

YES

ΔUnemployment rate

NO

NO

NO

NO

NO

YES

ΔNumber of preschool children

NO

NO

NO

NO

YES

YES

Adjusted R squared

0.003

0.003

0.003

0.003

0.003

0.003

Num. of Obs

3010

3010

3010

3010

3010

3010

D2
D3
Marriage dummy
D2×Marriage dummy
D3×Marriage dummy
ΔMinimum wage
D2×ΔMinimum wage
D3×ΔMinimum wage
Marriage×ΔMinimum wage

Note: D2 is an earnings dummy that represents individuals whose earnings in the previous year were between 1.05 and 1.41 million
yen. D3 is an earnings dummy that represents individuals whose earnings in the previous year were below 1.05 million yen. Robust
standard errors are in parentheses. ***p < 0.01, **p < 0.05, *p < 0.1.

Next, considering that married women with annual earnings under 1.05 million yen who
earn closer to 1.05 million yen have a higher probability of exceeding the threshold of 1.05 million
yen when there is an increase in the minimum wage, a larger decrease in work hours could exist
in the group that earns close to 1.05 million yen. To confirm this, we divide the group below 1.05
million yen into two groups, one relatively close to the annual income barrier and the otherrelatively far from the annual income barrier. First, we divide the group below 1.05 million yen
into two groups based on 0.9 million yen, and see how the adjustment of working hours supply
14

differs in response to an increase in the minimum wage between married women in the 0.9-1.05
million yen group and married women under 0.9 million yen. Next, we lower the 0.9 million yen
dividing line to 0.8 million yen and 0.7 million yen to include annual income groups that are moredistant from 1.05 million yen, and examine whether the average effect of the working houradjustment is weaker in response to an increase in the minimum wage. We examine whether thesame group below 1.05 million yen but closer to the annual income barrier adjust their working
hours more in response to an increase in minimum wage. We estimate using the estimation
equation (1). Change ∑2𝑘 =1 𝜇 𝑘 𝐷𝑖𝑘𝑡 −1 to ∑3𝑘=1 𝜇 𝑘 𝐷𝑖𝑘𝑡 −1 which includes a 1.05-1.41 million yen
dummy, a 0.90-1.05 million yen dummy and a below 0.90 million yen dummy (1.41 million yen
or more is the base group). The same method is used for estimation when separating groups of
1.05 million yen or less with 0.8 million yen or 0.7 million yen as the boundary line. We plot thecoefficients for the main variables of the above three estimation in Figures 4, 5, and 6 separately,
and the results of the remaining variables are shown in the appendix (see Tables A.1, A.2, andA.3).

Figure 4. The plot of coefficients for the main variables in the first difference estimation withconfidence intervals at the 90 percent significance intervals: Effects of minimum wage increases onwork hours supply for married women under spousal exemption after subdividing the below 1.05
million yen earnings dummy variable into 0.9–1.05 million yen and <0.9 million yen subgroups
Note: D2 is an earnings dummy that represents individuals whose earnings in the previous year were between 1.05 and 1.41 million yen. D3 isan earnings dummy that represents individuals whose earnings in the previous year were between 0.9 and 1.05 million yen. D4 i s an earnings
dummy that represents individuals whose earnings in the previous year were below 0.9 million yen.

Figure 4 represents the plots of coefficients of intersection related to minimum wages after
subdividing the below 1.05 million yen earnings dummy variable into 0.9–1.05 million yen and <0.9
15

millionyen

subgroups.

The

coefficientsfor

𝐷𝑖 × 𝑀𝑎𝑟𝑟𝑖𝑎𝑔𝑒 𝑑𝑢𝑚𝑚𝑦 ×∆𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑤𝑎𝑔𝑒, 𝑤ℎ𝑒𝑟𝑒 𝑖 = 2,3,4, shows how part time married women with annual earnings of
1.05–1.41-million-yen, 90–1.05-million-yen and less than 0.9 million yen adjust their work hours
under minimum wage increases, respectively. According to the coefficient values for 𝐷3 ×
𝑀𝑎𝑟𝑟𝑖𝑎𝑔𝑒 𝑑𝑢𝑚𝑚𝑦 × ∆𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑤𝑎𝑔𝑒, an increase of one yen in the minimum wage in the 0.9–
1.05 million yen group for the previous year’s annual earnings decreases the weekly work hours ofmarried women working part-time by 1.9 hours. The scale of the adjustment in working hours is larger
when limited to the group earning 0.9–1.05 million yen in the previous year, which is closer to the1.05 million yen threshold, than the scale of the adjustment in work hours for the group of married
women with annual earnings of less than 1.05 million yen shown in Table 3. From the coefficientvalues for 𝐷4 × 𝑀𝑎𝑟𝑟𝑖𝑎𝑔𝑒 𝑑𝑢𝑚𝑚𝑦 × ∆𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑤𝑎𝑔𝑒, the group with annual earnings below 0.9
million yen, who are also potentially eligible for the spousal exemption, showed no statisticallysignificant adjustment in their work hours and size of it is smaller than the that for 0.9–1.05 million
yen group. This suggests that only the group that is most likely to exceed the 1.05 million yen thresholdwhen the minimum wage increases will adjust their work hours.

Figure 5 shows the plots of coefficients of intersection related to minimum wages after
subdividing the below 1.05 million yen earnings dummy variable into 0.8–1.05 million yen and<0.8 million yen subgroups. From the coefficient values for 𝐷3 × 𝑀𝑎𝑟𝑟𝑖𝑎𝑔𝑒 𝑑𝑢𝑚𝑚𝑦 ×∆𝑀𝑖𝑛𝑖𝑚𝑢𝑚 𝑤𝑎𝑔𝑒, an increase of one yen in the minimum wage in the 0.8–1.05 million yen
group for the previous year’s annual earnings decreases the weekly work hours of married women
working part-time by 1.6 hours. The results of this analysis show that the adjustment of work
hours for married women in the 0.8–1.05 million yen group is smaller than the adjustment for
women in the 0.9–1.05 million yen group shown in Figure 4, but larger than the adjustment for
women in the 1.05 million yen or less group shown in Table 3. This is consistent with the
hypothesis that in a situation where the deduction is expected to be eliminated with the increasein annual income brought about by an increase in the minimum wage, groups closer to 1.05

16

million yen, and thus more likely to exceed the annual income threshold for the deduction, aremore likely to adjust their work hour supply.

Figure 5. The plot of coefficients for the main variables in the first difference estimation withconfidence intervals at the 90 percent significance intervals: Effects of minimum wage increases onwork hours supply for married women under spousal exemption after subdividing the below 1.05
million yen earnings dummy variable into 0.8–1.05 million yen and <0.8 million yen subgroups
Note: D2 is an earnings dummy that represents individuals whose earnings in the previous year were between 1.05 and 1.41 million yen. D3
is an earnings dummy that represents individuals whose earnings in the previous year were between 0.8 and 1.05 million yen. D4 is anearnings dummy that represents individuals whose earnings in the previous year were below 0.8 million yen.

Figure 6 shows the plots of coefficients of the intersection related to minimum wages
after subdividing the below 1.05 million yen earnings dummy variable into 0.7–1.05 million yen
and <0.7 million yen subgroups. The adjustment of work hours for married women in the 0.7–
1.05 million yen group is smaller than the adjustment for women in the 0.8 –1.05 million yen
group shown in Figure 5, but larger than the adjustment for all women in the 1.05 million yen orless group. These results are quite reasonable and indicate that the closer earnings are to the 1.05–
million yen threshold, the larger the size of the adjustment in work hours for married women
working part-time who are potentially eligible for spousal exemption as the minimum wage
increases.

17

Figure 6. The coefficient plots for the main variables in the first difference estimation withconfidence intervals at the 90 percent significance intervals: Effects of minimum wage increases onwork hours supply for married women under spousal exemption after subdividing the 1.05 million
yen earning dummy variable into 0.7–1.05 million yen and less than 0.7 million yen subgroups
Note: D2 is an earnings dummy that represents individuals whose earnings in the previous year were between 1.05 and 1.41 million yen. D3
is an earnings dummy that represents individuals whose earnings in the previous year were between 0.7 and 1.05 million yen. D4 is anearnings dummy that represents individuals whose earnings in the previous year were below 0.7 million yen.

6．

Further check for unobserved heterogeneity

Since the above analysis may have included a selection bias in the annual earnings group, we
perform a two-stage procedure following Origo and Pagani (2009). We estimate the probabilityof being in each annual earnings group (i.e., earning <0.8 million yen, from 0.8 to 1.05 million
yen, earning from 1.05 to 1.41 million yen, and earning more than 1.41 million yen), and use
these estimates to control for the earnings group selection bias in the work hours effect equation.4
In the first stage we estimate the following equation using a multinomial logit:
𝐷𝑖𝑗𝑡 = 𝛾 𝐷′ 𝑋𝐷𝑖𝑗𝑡 + 𝜇 𝐷𝑖𝑗𝑡

4(2)

While the above analysis examines separate cases for groups with annual earnings of 1.05 million
yen or less, and further divided by 0.7 million yen, 0.8 million yen, and 0.9 million yen, this sectionuses a case in which groups with annual earnings of 1.05 million yen or less are further divided by
0.8 million yen to perform robustness checks.
18

where 𝐷 is a dummy variable for the four earnings groups. 𝑋 is a vector of variables that may
influence their choice of earnings group, 𝛾𝑠 is according to the parameters, and ε is the errorterm.
We obtain correction terms from the Eq. (2) as follows:𝑘

𝐸 (𝜇⁄𝐷 = 𝑖) = ∑ (𝑗 ≠𝑖𝑃𝑗 𝑙𝑛𝑃𝑗
1 − 𝑃𝑗+ 𝑙𝑛𝑃𝑗 )(3)

where P is estimated probabilities from Eq. (2).
Then, we add the above terms as controls in the work-hours equation, as follows:
𝛥𝐻𝑜𝑢𝑟𝑠𝑖𝑗𝑡 = 𝛥𝑀𝑊𝑖𝑗𝑡 ( 𝛾4 + ∑2𝑘 =1 𝜑𝑘 𝐷𝑖𝑘𝑡 −1 + 𝛾5 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 + 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 × ∑2𝑘 =1 𝜇 𝑘 𝐷𝑖𝑘𝑡 −1 ) +𝛥𝑋𝑖𝑗𝑡 𝛽 ′ + ∑2𝑘=1 𝛾𝑘 𝐷𝑖𝑘𝑡 −1 + 𝛾3 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 + 𝑀𝑎𝑟𝑟𝑖𝑒𝑑 𝑖 × ∑2𝑘 =1 𝜀𝑘 𝐷𝑖𝑘𝑡 −1 + 𝜆𝐸 (𝜇𝑖𝑗𝑡⁄ 𝐷𝑖𝑗𝑡) + 𝑢 𝑖𝑗𝑡(4)

where all the variables have the same meaning as in Eq. (1), and 𝐸 (𝜇𝑖𝑗𝑡⁄𝐷𝑖𝑗𝑡) is a function of
the probabilities estimated from Eq. (3).
Table 7 summarizes the results. The results are presented here for the treatment groups of
1.05 million yen or less, separated by a 0.8 million yen dummy. Mills ratios 2, 3, and 4 are theprobabilities of selecting 1.05–1.41, 0.8–1.05, and 0.8 million yen or less, respectively, whenbased on selecting the 1.41 million yen group. The Mills ratios are not statistically significant.
The coefficient of the intersection term with the minimum wage and married dummies for theunder 0.8 million yen dummies is larger than before controlling for the annual earnings group
selection bias; however, they are still statistically significant. Thus, the results are robust after
controlling for heterogeneity by annual earnings group.

19

Table 4. Robustness check: two-stage estimation after subdividing the below 1.05 million yen
earnings dummy variable into 0.8–1.05 million yen and <0.8 million yen
First difference estimation
(1)
0.915
(16.472)-19.167(17.109)-5.876(14.954)-20.171(12.884)
25.559(22.159)
39.715*(21.970)28.012(19.630)
0.175(0.221)-0.009(0.660)0.828(0.696)0.279(0.607)0.801(0.508)-0.998(0.888)-1.638*(0.883)-1.082(0.790)0.034(0.066)0.087(0.194)-0.192(0.186)(2)
1.061(14.629)-19.019(16.634)-5.714(15.124)-19.897(12.256)
25.336(21.237)
39.442*(20.974)
27.626(19.403)
0.181(0.197)-0.015(0.585)0.822(0.676)0.272(0.611)0.790(0.486)-0.989(0.850)-1.627*(0.846)-1.067(0.780)0.034(0.072)0.086(0.177)-0.191(0.169)(3)
1.052(15.107)-19.117(16.097)-5.699(15.140)-19.928(14.008)
25.343(21.481)
39.631*(21.911)27.815(20.650)0.181(0.204)-0.014(0.606)0.826(0.656)0.271(0.612)0.792(0.555)-0.989(0.861)-1.635*(0.880)-1.074(0.829)0.034(0.068)0.089(0.195)-0.193(0.193)(4)
0.967(14.227)-19.057(16.684)-5.647(13.749)-19.916*(11.932)
25.546(19.527)39.541*(21.831)27.817(18.012)0.183(0.223)-0.011(0.572)0.824(0.673)0.269(0.553)0.791*(0.472)-0.997(0.783)-1.631*(0.873)-1.074(0.718)0.033(0.068)0.089(0.188)-0.192(0.182)(5)
0.925(15.532)-18.642(16.203)-5.704(14.301)-20.139(13.236)
25.640(20.470)
39.262*(21.428)28.226(19.916)
0.184(0.208)-0.009(0.620)0.806(0.658)0.271(0.579)0.800(0.525)-1.002(0.820)-1.619*(0.860)-1.092(0.799)0.035(0.069)0.090(0.186)-0.193(0.175)(6)
0.907(15.258)-18.683(16.440)-5.720(15.073)-20.102(12.749)
25.642(21.246)
39.329*(21.976)28.230(19.570)
0.185(0.203)-0.009(0.614)0.808(0.672)0.272(0.604)0.798(0.505)-1.002(0.852)-1.622*(0.885)-1.092(0.782)0.034(0.061)0.087(0.187)-0.191(0.178)

ΔAge

NO

YES

YES

YES

YES

YES

ΔNon-labor income

NO

NO

YES

YES

YES

YES

ΔHusband’s

income

NO

NO

NO

YES

YES

YES

ΔUnemployment rate

NO

NO

NO

NO

NO

YES

ΔNumber of preschool children

NO

NO

NO

NO

YES

YES

Adjusted R2

0.005

0.005

0.005

0.004

0.005

0.005

Num. of Obs

3010

3010

3010

3010

3010

3010

D2
D3
D4
Marriage dummy
D2×Marriage dummy
D3×Marriage dummy
D4×Marriage dummy
ΔMinimum wage
D2×ΔMinimum wage
D3×ΔMinimum wage
D4×ΔMinimum wage
Marriage dummy×ΔMinimum wage
D2×Marriage dummy×ΔMinimum wage
D3×Marriage dummy×ΔMinimum wage
D4×Marriage dummy×ΔMinimum wage
E(μ⁄D=1.05-1.41 million yen group)E(μ⁄D=0.8-1.05 million yen group)E(μ⁄D=less than 0.8 million yen group)

Note: D2 is an earnings dummy that represents individuals whose earnings in the previous year were between 1.05 and 1.41 million yen. D3
is an earnings dummy that represents individuals whose earnings in the previous year were between 0.8 and 1.05 million yen. D4 is anearnings dummy that represents individuals whose earnings in the previous year were below 0.8 million yen. Bootstrapped standard errors(300 replications) are in parenthesis. ***p < 0.01, **p < 0.05, *p < 0.1.

20

These results indicate that those who originally received spousal exemptions adjusted
their work hours themselves in response to the increase in the minimum wage under the minimum
wage system and the spousal exemption system in Japan.

7．

Conclusions

In recent years, the minimum wage in Japan has been raised by around 20 yen per hour each year,
which should be an incentive to actively increase the supply of part-workers, especially women,
who are more like to benefit from an increase in the minimum wage. Meanwhile, married women
who work part-time and are eligible for the spousal exemption system may reduce their labor
supply to avoid exceeding the annual earnings threshold, and continue to qualify for exemption
in response to the wage increase triggered by the minimum wage increase. Therefore, it isimportant to clarify how married women working part-time perform labor supply under theminimum wage and spousal exemption systems, which have conflicting effects on the labor
supply.
In this study, we use each annual earnings group of single women as a control group, andanalyze how the supply of work hours of married women who potentially qualify for the spousal
exemption system responds to an increase in the minimum wage by controlling for demand -side
factors and fixed effects by annual earnings. The results indicate that married women with annual
earnings of less than 1.05 million yen in the previous year statistically significantly reduce theirwork hours as the minimum wage increases in the current year. However, married women whose
previous year’s annual earnings were between 1.05 and 1.41 million yen do not reduce theirworking hours in the current year. In other words, while the increase in the minimum wage caused
married women in the spousal exemption group to adjust their working hours in consideration of
the 1.05 million yen ceiling, they do not react to the 1.41 million yen ceiling. The scale ofadjustment in work hours is larger for married women whose annual earnings are close to 1.05
million yen, particularly in the subgroup 0.9 million yen or more. That is, we found that married
women, who are potentially eligible for the spousal deduction, are adjusting their labor supply
with an awareness of the annual income limit at which the real deduction amount begins to declinewith rising wages. This is consistent with the fact that married women in the analyzed sample
shown in the histogram in Figure 2 are concentrated around 1,050,000 yen. Furthermore, theresults of the analysis after calculating the probability of selecting an annual earnings group arerobust.
Previous studies focusing on Japan's spousal deduction system have analyzed the labor
supply of married women based on changes in the "income barrier" for married women causedby policy changes, but few have analyzed cases where the "income barrier" itself remains fixedand other factors cause an increase in wages for married women, and then adjust the labor supply
21

so that it does not exceed the "income barrier" created by Japan's spousal deduction system.
Additionally, most of the previous studies analyzing the minimum wage on labor supply havelooked at it from the demand side (Akesaka et. al. 2017), and our study finds that it does, in fact,include some supply-side adjustments. In this study, married women who were subject to theannual income limit of application of the spousal deduction, especially those who worked below
1.05 million yen, showed an increase of one yen in the minimum wage decreasing their weekly
work hours by 1.266 hours.
However, this study also contains the following limitations. The weekly work hours inthis study use data on work hours as of December of each year. While this is a feature that makes
it easy to capture adjustments in working hours in the sense that it is a time of year when there isa large potential for year-end adjustments, it does not measure the full scale of the working houradjustment because it is not annual working hours. Since we are using weekly working hours andthe adjustment is more on an annual basis, the actual effect could be much larger. Furthermore,since this study uses survey data from individuals, there is a certain potential for error. In the
future, more accurate data on working hours should be obtained from company human resource
data for the study.
This study’s results provide insights into Japan’s labor market, where labor shortages will
become more severe in the future. It can be assumed that more married women who work parttime will adjust their employment levels after the hourly minimum wage was raised by 30 yen in
2022. The spousal exemption system has been revised since 2018, raising the annual earnings
limit for the exemption to 1.5 million yen. Moreover, married women who work part-time may
be less inclined to reduce their working hours in response to the wage increase brought about by
the minimum wage hike. However, to improve labor shortages despite the continued increase inminimum wages in the future, it is important to design a system that considers the conflicting
impacts of the two systems on the labor supply.

22

Appendix
Table. A.1.
First difference estimation
(1)
0.967
(14.862)-21.137(19.204)-6.763(13.337)-19.528(12.768)
25.163(20.580)
46.609*(24.415)
25.326(18.557)
0.184(0.208)-0.012(0.597)0.911(0.790)0.312(0.538)0.772(0.504)-0.982(0.824)-1.947**(0.990)-0.975(0.742)(2)
1.104(14.870)-21.000(19.211)-6.615(13.348)-19.269(12.819)24.954(20.607)46.347*(24.444)24.989(18.592)
0.190(0.209)-0.017(0.597)0.906(0.791)0.305(0.538)0.762(0.506)-0.974(0.825)-1.937*(0.991)-0.962(0.743)(3)
1.103(14.873)-21.110(19.227)-6.598(13.356)-19.297(12.818)
24.954(20.611)46.558*(24.459)
25.130(18.614)0.190(0.209)-0.017(0.597)0.910(0.791)0.305(0.539)0.763(0.506)-0.974(0.825)-1.945**(0.992)-0.967(0.744)(4)
1.013(14.883)-21.052(19.226)-6.554(13.355)-19.293(12.793)25.172(20.650)
46.447*(24.444)25.151(18.606)
0.192(0.209)-0.014(0.597)0.908(0.791)0.303(0.539)0.763(0.505)-0.982(0.826)-1.940*(0.991)-0.967(0.744)(5)
0.983(14.884)-20.868(19.237)-6.447(13.359)-19.502(12.792)
25.258(20.652)
46.302*(24.448)
25.384(18.618)
0.192(0.208)-0.012(0.597)0.900(0.792)0.298(0.539)0.771(0.505)-0.986(0.826)-1.934*(0.991)-0.977(0.744)(6)
0.950(14.888)-20.941(19.274)-6.465(13.363)-19.459(12.791)
25.267(20.652)
46.378*(24.493)25.408(18.621)0.195(0.208)-0.011(0.598)0.903(0.793)0.298(0.539)0.769(0.505)-0.986(0.826)-1.937*(0.993)-0.978(0.744)

ΔAge

NO

YES

YES

YES

YES

YES

ΔNon-labor income

NO

NO

YES

YES

YES

YES

ΔHusband’s

income

NO

NO

NO

YES

YES

YES

ΔUnemployment rate

NO

NO

NO

NO

NO

YES

ΔNumber of preschool children

NO

NO

NO

NO

YES

YES

Adjusted R2

0.008

0.008

0.008

0.007

0.008

0.008

Num. of Obs

3010

3010

3010

3010

3010

3010

D2
D3
D4
Marriage dummy
D2×Marriage dummy
D3×Marriage dummy
D4×Marriage dummy
ΔMinimum wage
D2×ΔMinimum wage
D3×ΔMinimum wage
D4×ΔMinimum wage
Marriage dummy×ΔMinimum wage
D2×Marriage dummy×ΔMinimum wage
D3×Marriage dummy×ΔMinimum wage
D4×Marriage dummy×ΔMinimum wage

23

Table. A.2.
First difference estimation
(1)
0.967
(14.862)-18.669(16.342)-6.029(14.363)-19.528(12.768)
25.163(20.580)
39.220*(21.568)
27.247(19.551)
0.184(0.208)-0.012(0.597)0.806(0.664)0.280(0.582)0.772(0.504)-0.982(0.824)(2)
1.120(14.870)-18.515(16.350)-5.855(14.376)-19.238(12.820)
24.929(20.607)38.930*(21.601)
26.843(19.587)
0.190(0.209)-0.018(0.597)0.800(0.665)0.273(0.582)0.760(0.506)-0.973(0.825)(3)
1.119(14.873)-18.593(16.365)-5.843(14.385)-19.265(12.819)24.929(20.611)39.098*(21.616)27.004(19.615)
0.190(0.209)-0.018(0.597)0.803(0.665)0.272(0.582)0.762(0.506)-0.973(0.825)(4)
1.029(14.883)-18.534(16.364)-5.786(14.384)-19.261(12.793)25.148(20.650)
39.011*(21.596)27.013(19.603)
0.193(0.209)-0.015(0.597)0.801(0.665)0.270(0.582)0.762(0.505)-0.981(0.826)(5)
0.997(14.884)-18.111(16.378)-5.844(14.388)-19.482(12.792)
25.239(20.652)
38.725*(21.597)27.421(19.626)
0.193(0.208)-0.013(0.597)0.782(0.666)0.272(0.583)0.770(0.505)-0.985(0.826)(6)
0.959(14.887)-18.179(16.401)-5.864(14.392)-19.431(12.792)
25.249(20.652)
38.816*(21.627)27.428(19.628)
0.196(0.208)-0.011(0.598)0.785(0.667)0.273(0.583)0.768(0.505)-0.986(0.826)-1.618*(0.867)-1.051(0.784)-1.606*(0.868)-1.035(0.785)-1.613*(0.869)-1.041(0.787)-1.609*(0.868)-1.041(0.786)-1.596*(0.868)-1.059(0.787)-1.600*(0.870)-1.059(0.787)

ΔAge

NO

YES

YES

YES

YES

YES

ΔNon-labor income

NO

NO

YES

YES

YES

YES

ΔHusband’s

income

NO

NO

NO

YES

YES

YES

ΔUnemployment rate

NO

NO

NO

NO

NO

YES

ΔNumber of preschool children

NO

NO

NO

NO

YES

YES

Adjusted R2

0.006

0.005

0.005

0.005

0.005

0.005

Num. of Obs

3010

3010

3010

3010

3010

3010

D2
D3
D4
Marriage dummy
D2×Marriage dummy
D3×Marriage dummy
D4×Marriage dummy
ΔMinimum wage
D2×ΔMinimum wage
D3×ΔMinimum wage
D4×ΔMinimum wage
Marriage dummy×ΔMinimum wage
D2×Marriage dummy×ΔMinimum wage
D3×Marriage dummy×ΔMinimum wage
D4×Marriage dummy×ΔMinimum wage

24

Table. A.3.
First difference estimation
(1)
0.967
(14.862)-12.657(15.153)-9.554(15.399)-19.528(12.768)
25.163(20.580)
34.444*(20.304)28.505(20.642)0.184(0.208)-0.012(0.597)0.558(0.613)0.426(0.626)0.772(0.504)-0.982(0.824)-1.421*(0.813)-1.083(0.830)(2)
1.131(14.870)-12.493(15.162)-9.357(15.413)-19.218(12.820)
24.913(20.607)34.137*(20.339)28.032(20.678)
0.191(0.209)-0.018(0.597)0.551(0.613)0.418(0.626)0.760(0.506)-0.972(0.825)-1.409*(0.815)-1.064(0.832)(3)
1.130(14.873)-12.540(15.178)-9.349(15.424)-19.239(12.819)24.913(20.610)34.237*(20.356)
28.196(20.708)
0.191(0.209)-0.018(0.597)0.553(0.614)0.417(0.627)0.761(0.506)-0.972(0.825)-1.413*(0.815)-1.070(0.833)(4)
1.049(14.883)-12.465(15.175)-9.307(15.424)-19.235(12.796)25.110(20.652)
34.154*(20.332)
28.212(20.701)
0.193(0.209)-0.015(0.597)0.550(0.614)0.415(0.627)0.760(0.505)-0.979(0.826)-1.409*(0.814)-1.070(0.832)(5)
1.019(14.884)-12.143(15.183)-9.365(15.428)-19.446(12.796)25.197(20.654)34.096*(20.332)
28.451(20.725)
0.193(0.208)-0.014(0.597)0.536(0.614)0.417(0.627)0.769(0.505)-0.984(0.826)-1.406*(0.814)-1.082(0.833)(6)
0.996(14.888)-12.170(15.196)-9.382(15.436)-19.417(12.795)
25.203(20.656)
34.126*(20.347)
28.471(20.731)0.195(0.208)-0.013(0.598)0.538(0.615)0.418(0.627)0.767(0.505)-0.984(0.827)-1.407*(0.815)-1.083(0.834)

ΔAge

NO

YES

YES

YES

YES

YES

ΔNon-labor income

NO

NO

YES

YES

YES

YES

ΔHusband’s

income

NO

NO

NO

YES

YES

YES

ΔUnemployment rate

NO

NO

NO

NO

NO

YES

ΔNumber of preschool children

NO

NO

NO

NO

YES

YES

Adjusted R2
Num. of Obs

0.013
3010

0.013
3010

0.013
3010

0.013
3010

0.014
3010

0.014
3010

D2
D3
D4
Marriage dummy
D2×Marriage dummy
D3×Marriage dummy
D4×Marriage dummy
ΔMinimum wage
D2×ΔMinimum wage
D3×ΔMinimum wage
D4×ΔMinimum wage
Marriage dummy×ΔMinimum wage
D2×Marriage dummy×ΔMinimum wage
D3×Marriage dummy×ΔMinimum wage
D4×Marriage dummy×ΔMinimum wage

F unding

This research did not receive any specific grant from funding agencies in the public, commercial,or not-for-profit sectors.
Declaration of Conflict of Interest: The authors have no conflicts of interest to declare.

25

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