Who bears the burden of social insurance? Evidence from Japanese health and long-term care insurance data

Using the society-managed health insurance data, which is cross-sectional time-series and covers 1670 health insurance societies for seven years (FY1995–2001), we found for the first time in Japan that the majority of the employers' contribution to health insurance is shifting back onto the employees in the form of wage reduction. On the other hand, we cannot find such evidence for the contribution to long-term care insurance using a two-year (FY2000–2001) panel data set. The difference can be theoretically explained by how employees value the contribution relative to social security benefits they enjoy. J. Japanese Int. Economies 18 (4) (2004) 565–581.