Economic theory predicts that vaccination policies at the local level can be negatively affected by the policies of neighboring regions because of free-riding motives, whereas positive dependency may exist due to policy diffusions among localities. By using the unique variations in the provision of vaccination subsidies in Japan, we assess how vaccination policies in a local government are affected by the decisions of neighboring governments. We find that the provision of vaccination subsidies is positively correlated with the decisions of neighboring localities. Moreover, a correlation is found with neighboring municipalities within the same prefecture but not with those in surrounding prefectures, indicating that the correlations are likely to arise because of mimicking behavior among localities within a prefecture. Our results show that vaccination policies tend to be formed following neighboring municipalities and do not necessarily aim to optimize community health, thus questioning the autonomy of local government authorities regarding vaccination policies.

A shortage of physicians in local public hospitals is often a heated political issue. When local politicians have the authority to intervene in the management of a public hospital, they may increase the employment of physicians during election years in order to alleviate the shortage. We test this hypothesis empirically using a census of city hospitals in Japan from 2002 to 2011 (N = 4583). Our results support the hypothesis that the number of physicians increases in election years. This effect is stronger in cities with a greater population of elderly residents. We also find that physicians tend to come from university hospitals in the same region. Overall, this paper provides direct evidence of political intervention on physician employment.

Healthcare utilization after natural disasters remains understudied. In general, people in Japan pay 10%-30% of total amount of costs, according to their health insurance plan. A policy exempting survivors from copayments was introduced after the Great East Japan Earthquake in March 2011, which had a magnitude of 9.0 on the Richter scale and followed by devastating tsunamis. Among the disaster-affected areas, Miyagi prefecture experienced the largest number of deaths and the greatest extent of damage. However, the exemption was suspended in Miyagi prefecture from April, 2013, because of the huge governmental financial burden due to the immensity of damage from the disaster. Subsequently, in April 2014, the exemption was re-introduced, with smaller coverage. We, therefore, evaluated the influence of this policy change on monthly healthcare utilization in Miyagi prefecture between April 2008 and June 2015. We also evaluated the association between the proportion of people exempted from copayment in each municipality and the difference in healthcare utilization before and after the suspension using multivariable linear regression. Healthcare utilization in Miyagi increased immediately after the institution of the exemption policy and it peaked after one year. In March 2013, just before the suspension, a rapid increment in healthcare utilization was observed, suggesting that the copayment may be a barrier for people in the disaster-affected area to access to healthcare. The exemption policy did help the survivors to use healthcare utilization in Miyagi. After devastating natural disasters, policymakers should guarantee that all survivors can utilize healthcare services on demand.

Although the payment systems of public health insurance vary greatly across countries, we still have limited knowledge of their effects. To quantify the changes from a benefits in kind system to a refund system, we exploit the largest physician strike in Japan since the Second World War. During the strike in 1971 led by the Japan Medical Association (JMA), JMA physicians resigned as health insurance doctors, but continued to provide medical care and even health insurance treatment in some areas. This study uses the regional differences in resignation rates as a natural experiment to examine the effect of the payment method of health insurance on medical service utilization and health outcomes. In the main analysis, aggregated monthly prefectural data are used (N = 46). Our estimation results indicate that if the participation rate of the strike had increased by 1% point and proxy claims were refused completely, the number of cases of insurance benefits and the total amount of insurance benefits would have decreased by 0.78% and 0.58%, respectively compared with the same month in the previous year. Moreover, the average amount of insurance benefits per claim increased since patients with relatively less serious diseases might have sought health care less often. Finally, our results suggest that the mass of resignations did not affect death rates. (C) 2017 Elsevier B.V. All rights reserved.

The reform of Japan's child benefit system in 2010 was followed by the abolition of the tax allowance for dependents in 2011. The present study uses micro-level data from the Employment Status Survey and an estimation of a discrete-choice model of labour supply to examine the effects of these reforms on the labour supply, after-tax incomes and the utility of households. The results show that the reforms decreased the labour supply of parents and that the funds necessary to implement them were underestimated by 22% when this behavioural change was disregarded.

While studies have shown that reductions in out-of-pocket payments for vaccination generally encourages vaccination uptake, research on the impact on health outcomes has rarely been examined. Thus, the present study, using municipal-level survey data on a subsidy programme for influenza vaccination in Japan that covers the entire country, examines how reductions in out-of-pocket payments for vaccination among non-elderly individuals through a subsidy programme affected regional-level influenza activity. We find that payment reductions are negatively correlated with the number of weeks with a high influenza alert in that region, although the correlation varied across years. At the same time, we find no significant correlation between payment reductions and the total duration of influenza outbreaks (i.e. periods with a moderate or high alert). Given that a greater number of weeks with a high alert indicates a severer epidemic, our findings suggest that reductions in out-of-pocket payments for influenza vaccination among the non-elderly had a positive impact on community-wide health outcomes, indicating that reduced out-of-pocket payments contributes to the effective control of severe influenza epidemics. This suggests that payment reductions could benefit not only individuals by providing them with better access to preventive care, as has been shown previously, but also communities as a whole by shortening the duration of epidemics.

Vaccination against infectious diseases produces externalities, and providing subsidies is one way of internalizing the externality. The effect of subsidies as a policy tool depends on individual's response to the cost of vaccine. However, there have been few studies on the effects of vaccine costs on vaccination uptake. Using regional variations in vaccination subsidy amount within Japan's current immunization program, we examined the impact of subsidies for the cost of influenza vaccine on the vaccination rates and on two health outcome measures. Our results show that an increase in the subsidy amount by 1,000 yen (10 USD) leads to a one percentage point increase in the vaccination rate among the elderly, suggesting that vaccination rate is responsive to the costs of vaccination. On the other hand, we found no substantial effects on health outcomes. (C) 2015 Elsevier B.V. All rights reserved.

This study examines how Japanese municipalities restore their fiscal balance after a budget shock. The results show that these fiscal adjustments occur mainly via changes in government investment, accounting for 63-95% of adjustments in permanent unit innovations in grants and own-revenue. In contrast to the role of expenditure, the municipalities' own-source revenue plays a limited role in balancing the local budget. The results also reveal that 40% of the increase in own-source revenue is offset by a reduction in grants. This suggests that the current grants system discourages municipalities from increasing their own-source revenue. Furthermore, municipalities can induce grants by expanding government current expenditure. Here, a 1 yen increase in current expenditure is followed by an increase in grants of 0.65 yen in subsequent years. Finally, we conduct an additional analysis based on population size to study how the adjustment process varies among municipalities of different sizes. Journal of Comparative Economics 43 (4) (2015) 1053-1068. Keio University, 2-15-45 Mita, Minato-ku, Tokyo 1088345, Japan;Nagoya University, Furocho, Chikusaku, Nagoya 4648601, Japan. (C) 2014 Association for Comparative Economic Studies. Published by Elsevier B.V. All rights reserved.

This study proposes a method to obtain the social marginal costs of public funds (SMCF) that allows for heterogeneity on a household basis as well as labor supply responses along both the extensive and the intensive margins. To demonstrate our methodology, we take the example of the 1999 national income tax reform in Japan and evaluate it by estimating the SMCFs for changing marginal tax rates in different income brackets. We estimate the discrete choice model (DCM) of labor supply using a 1997 data set of Japanese households, and we use the estimates to generate the SMCFs with a DCM micro-simulation. We evaluate the simulated SMCFs with various distributional weights and find that the value of the SMCF for a 1 % increase in the marginal tax rate in any given income bracket decreases as we move across brackets from the bottom to the top. This finding suggests that the national government should have made the Japanese income tax system more progressive rather than less progressive as carried out in the 1999 reform. Our method is readily transferrable to tax reforms in other countries as well.

This study explores the effects of spousal allowances (SAs) in the Japanese system of personal income taxes, using the micro-simulation method based on the discrete choice model of labor supply. Our simulations show that the complete abolishment of SAs would increase the average annual working hours of all wives by 1.6% only, which is smaller than previous findings in the Japanese literature. If we focus on households benefiting from SAs, the rate of increase in the wife working hours is even smaller (.1%). In addition, one particular case of SA reduction leads to a decrease in the labor supply of wives. We argue that these unexpected results are due to our explicit consideration of the fixed cost of labor market participations, which has been previously ignored in the Japanese studies. J. Japanese Int. Economies 34 (2014) 162-178. Faculty of Economics, Keio University, 2-15-45 Mita, Minato-ku, Tokyo 108-8345, Japan; Faculty & Graduate School of Economics, The University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113-0033, Japan. (C) 2014 Elsevier Inc. All rights reserved.

This study investigates the role of fiscal advisors in maintaining government fiscal discipline when the advisor's appointment is determined endogenously. Our theoretical model shows that an incumbent politician has an incentive to employ an external advisor as a commitment device for fiscal discipline before being aware of his own competence level. The advisor acts as a restraint on public expenditure, which works to control the incumbent politician's ex post overspending to buy votes. Our empirical analysis supports this hypothesis in the Japanese case where governments with directors from the central government tend to spend less. © 2013 Springer-Verlag Berlin Heidelberg.

In this study, we recast the formula of the social marginal cost of public funds (SMCF) and highlight the role of what we call individual marginal costs of public funds (IMCF). After elaborating on aspects of distributional weights, we estimate the wage elasticity of labor supply and the IMCFs on a household basis. This allows us to explore not only the distributions of the elasticity and the IMCFs but also their relations to household income, which helps us assess the assumptions made in previous studies. Further, we use the SMCF estimates to evaluate the system of personal income taxes in Japan. © The Author(s) 2013.

This paper evaluates the drastic reforms of Japanese public health insurance initiated in 2006. We employ a computable general equilibrium framework to numerically examine the reforms for an aging Japan in the dynamic context of overlapping generations. Our simulation produced the following results: first, an increase in the co-payment rate, a prominent feature of the 2006 reform, would promote economic growth and welfare by encouraging private saving. Second, the ex-post moral hazard behavior following the increase in co-payment rates, however, reduces economic growth. Third. Japan's trend of increasing the future public health insurance benefits can mainly be explained by its aging population, and increasing the co-payment rate does little to reduce future payments of public health insurance benefits. Fourth, the effect on future economic burdens of reducing medical costs through efficiencies in public health insurance, emphasis on preventive medical care, or technological progress in the medical field is small. Finally, a policy of maintaining public health insurance at a fixed percentage of GDP will require reducing public health insurance benefits, perhaps up to 45% by 2050. Such a policy also reduces economic growth until approximately 2035. Our simulation indicates that the reform does not significantly reduce future public health insurance benefits, but it can enhance economic growth and welfare by encouraging private saving. (C) 2011 Elsevier B.V. All rights reserved.

In this paper, we estimate labor responses of Japanese prime-age males by taking into consideration the Japanese income tax system and utilizing a large micro-data set. We employ three maximum likelihood methods: (i) a modified version of Hausman (1979, 1981), which assumes a linear labor supply function
(ii) that given by Zabalza (1983), which assumes CES preferences
and (iii) that given by Van Soest (1995), which employs the translog utility function and assumes discrete labor hour choice. While the estimates based on the Hausman and Zabalza methods fare poorly, those based on the Van Soest method result in more plausible labor responses. However, these responses are larger than those of the North American and European counterparts. © 2011 Elsevier Inc.

Local governments invest in public infrastructure to develop their regions. When they depend on intergovernmental grants for local development and have opportunities to lobby upper-level governments for such grants, horizontal intergovernmental competition in lobbying activity may emerge in addition to competition over public infrastructure. This paper empirically examines the existence of these interactions between Japanese localities, by using data on the value of industrial parks as infrastructure provisions and on personnel interchanges between the central and local governments as a measure of lobbying activity. Our results suggest that a Japanese local government's choice of the size of industrial parks and its invitation to central officers to act as a director on loan are positive responses to the neighboring local government's policy choices. As the value of the industrial parks in a district is affected by the neighboring districts' lobby activities and their industrial park values, we can interpret these results as evidence of inter-regional competition in these two dimensions, rather than control by the central government in this unitary state.

The purpose of this paper is to investigate, using micro data, the strength in Japan of the precautionary saving motive. While numerical simulations suggest the economic importance of precautionary saving, the empirical evidence is mixed. In this paper, we apply the buffer-stock saving model and focus on the effect of unemployment risk on wealth accumulation. We find that uncertainty has a positive and statistically significant effect on the wealth-to-income ratio, and that buffer-stock savings account for 6 or 15 percent of net financial assets. Housing loans and expenditures associated with children decrease this ratio. (C) 2007 Elsevier B.V. All rights reserved.

We examine the length of time between when an individual feels sick and when he/she visits a doctor using survival analysis to capture the dynamic aspects of this behavior. If the disease is light, actions such as OTC medicine or sick leave are alternatives to visiting a clinic or a hospital immediately. The timing of the visit depends only the person's decision, not on a doctor's, so we can limit discussion to the effect of ex-post moral hazard excluding physician induced demand. Participants were asked to keep a log of illness-related behavior such as dates of episodes, subjective symptoms, sick leaves, and medical treatment at hospitals. Neither the copayment rate nor access cost had a significant effect on the behavior of visiting a doctor, whereas available alternatives delay the timing of a visiting. Severe symptoms and fever hastened the time. The results suggest that the traditional argument about ex-post moral hazard is somewhat misleading. © Springer Science + Business Media, Inc. 2006.

We argue that tax policy in Japan is on a shaky empirical ground. First, until recently, no serious attempts had been made to estimate labour responses to taxation, especially with respect to prime-age male workers. Second, while there is some stock of empirical analysis on labour supply response of female workers, few studies have appropriately allowed for the budget constraint structure implied by the tax system. Third, as a corollary, there is not a reliable stock of empirical estimates to quantify the frequently employed concepts of "disincentives to work" or "distortion." Given this state of the literature, we introduce our estimates, and calculate the degree of distortion using the concept of the marginal cost of public funds. © 2005 Elsevier Inc. All rights reserved.