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The Effect of Inheritance Receipt on Labor Supply: A Longitudinal Study of Japanese Women

  • Junya Hamaaki EMAIL logo und Yoko Ibuka
Veröffentlicht/Copyright: 24. September 2024

Abstract

This study examines the effect of inheritance receipt on labor supply, exploring the empirical issues associated with inheritance expectations, informal caregiving, and liquidity constraints. The literature has not examined the possibility that ignoring the labor supply increase associated with the termination of caregiving can lead to an underestimation of the decrease in labor supply after inheritance. Based on a dataset of Japanese women, we found that inheritance decreased labor supply, primarily through changes in the extensive margin, particularly for recipients in their 50s and under 40 years of age with children. Unlike labor supply, household expenditures hardly change after an inheritance. Furthermore, unanticipated inheritances reduce labor supply compared to anticipated inheritances. Additionally, controlling for the termination of caregiving responsibilities resulted in a 25 % larger estimate of the wealth effect of inheritance receipt on labor supply. Finally, pre-inheritance liquidity constraints have no effect on changes in labor supply.

JEL Classification: E24; H31; J22

Corresponding author: Junya Hamaaki, Faculty of Economics, Hosei University, 4342 Aihara, Machida - shi, Tokyo 194-0298, Japan; and Economic and Social Research Institute, Cabinet Office, 1-6-1 Nagata-cho, Chiyoda-ku, Tokyo 100-8914, Japan, E-mail: 

Award Identifier / Grant number: 19K01703, 20H01513, 20K01731

Acknowledgments

We thank three anonymous referees for their useful comments and suggestions. We are also grateful to Yoko Niimi, Haruko Noguchi, Jongsang Park, and Saki Sugano for their helpful comments on an earlier draft of this paper. We thank Taiyo Fukai, Kazuhito Higa, Masahiro Hori, Koichiro Iwamoto, Keiko Murata, Takeshi Niizeki, Yoshitomo Ogawa, Fumihiko Suga, participants at Hosei University, Seijo University, and other online workshops for their comments and support. We are grateful to the Panel Data Research Center at Keio University for providing the microdata from the Japanese Panel Survey of Consumers. Special thanks go to Ralph Paprzycki for his excellent English editing services. This work was supported by JSPS KAKENHI Grant Numbers 20K01731 (Hamaaki and Ibuka), 19K01703, and 20H01513 (Hamaaki). The views expressed in this study are personal and do not represent those of any of the institutions with which we are affiliated.

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Supplementary Material

This article contains supplementary material (https://doi.org/10.1515/bejeap-2022-0412).


Received: 2022-11-13
Accepted: 2024-08-14
Published Online: 2024-09-24

© 2024 Walter de Gruyter GmbH, Berlin/Boston

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