The Effect of the Recent Inheritance Tax Reform on Bequest Behaviour in Japan

This paper examines the behavioural response of households to wealth transfer taxation using household survey data from Japan, with particular attention being paid to the implications of different bequest motives that households may have. The data reveal that relatively few households plan to reallocate the newly taxable amount of wealth to their own consumption or inter vivos transfers in response to the recent lowering of the basic deduction of the inheritance tax. Our analysis shows that this partly reflects the fact that a relatively large share of households have no or a weak bequest motive in Japan. However, our estimation results also suggest that parents with an altruistic bequest motive are more likely to avoid an increase in their children's tax bill by reallocating the newly taxable amount of wealth to inter vivos transfers than those with no or a weak bequest motive. By contrast, parents with an exchange bequest motive are more likely to respond to the tax reform by reallocating the newly taxable amount of wealth to their own consumption, though they seem to exhibit a similar response to those with an altruistic bequest motive in some cases.     

Wage Differentials and Labour Supply of Married Women in Japan: Part-time and Informal Sector Work Opportunities

This paper studies the pattern of labour supply of Japanese married women. The study develops and tests a discrete work choice model with a differing level of fixed cost of work and equalizing wage differential s. This accounts for differences in work characteristics of the regular status and part-time status work at firms, the family and self-employment. A 20 to 30 per cent hourly wage differential was obser ved between work categories with control on skills, region and other variables. Different effects are studied of the numbe r and ages of children, a grandmother's presence and the wife's educational attainments on the category of work selected.
The data employed come from The Occupational History and Mobility Survey of Women 1983 (OHMS), conducted by the National Institute for Vocational and Occupational Research, and allow detailed wage regression and consideration of different work categories which were not feasible in previous works. Empirical regulari ties of the Japanese labour market, such as the absence of growth in labour participation for mothers with small children, are better explained when work categories are dealt with separately.     

An Axiomatic Foundation of the Multiplicative Human Development Index

The aggregation formula in the Human Development Index (HDI) was changed to a geometric mean in 2010. In this paper, we search for a theoretical justification for employing this new HDI formula. First, we find a maximal class of index functions, what we call quasi‐geometric means, that satisfy symmetry for the characteristics, normalization, and separability. Second, we show that power means are the only quasi‐geometric means satisfying homogeneity. Finally, the new HDI is the only power mean satisfying minimal lower boundedness, which is a local complementability axiom proposed by Herrero et al. (2010).     

Housing Finance Arrangements,Wealth Positioning and Housing Consumption in Japan: An Analysis of Built-for-sale Homeowners

Home purchase is financed through equity and debt. Housing finance arrangements require initial downpayments and impose monthly repayments. Similar to many countries, Japanese households accumulate savings out of their current income and receive private transfers from parents or relatives. From the survey conducted by the Ministry of Land, Transportation and Infrastructure from 1992 to 2000, the paper analyses the time spell until built-for sale homebuyers have amassed sufficient equity to meet the downpayment requirement. For the first-time buyers, private aid in form of cash was the dominant component of equity besides own savings. The innovative feature of our paper is to categorize the households into four classes of positive versus negative excess savings and positive versus negative excess “luck” as other equity sources including private transfers get termed here. For each category we estimate the duration of the accumulation process, and perform a sensitivity analysis that compares the spells under varying amounts of GHLC-loans with other types of mortgages. Since GHLC-loans are means-tested, they can effectively counteract the regressive effects arising from income; but as we will show they cannot really speed up the access in favour of the poorer strata. This finding sheds light on a growing wealth disparity that causes self-selection in ownership access.     

Restructuring East Asian exchange rate regimes

This paper investigated the degree of misalignment of the East Asian currencies against the U.S. dollar and against the Japanese yen under a de facto dollar-pegged exchange rate regime (January 1995 to May 1997). We found that overvaluation against the yen started in the Malaysian ringgit and the Philippine peso from January 1996 and the Thai baht from June 1996. Although the Indonesian rupiah and the Korean won against the yen were still undervalued in May 1997, degree of misalignment of both currencies narrowed from April 1995. Large withdrawal of Japanese claims after the financial crisis reduced Japanese bank lendings from $123.8 billion to $85.9 billion in end-June 1998. In 1998, Japanese Foreign Direct Investment (FDI) to East Asia fell as much as 44% from the previous year. In conclusion the paper stresses the importance of the stability in yen/dollar exchange rate to avoid large volatility in Japanese capital flow.     

HOW REVOLUTIONARY IS THE “NERICA REVOLUTION”? EVIDENCE FROM UGANDA

A new high‐yielding upland rice variety known as New Rice for Africa (NERICA) has been widely recognized as a promising technology for addressing the food shortage in sub‐Saharan Africa. However, there has been no on‐farm yield data to support this optimism. The present study attempts to assess the actual and potential yield of NERICA in Uganda where it has been introduced recently. We found that NERICA's yield is higher (2.5 tons) for farmers who had rice‐growing experience than those who had no previous experience (1.7 tons). These findings strongly indicate that strengthening training, extension, and other supporting systems is the key to the success of the “NERICA revolution” in this country.