A REAPPRAISAL OF THE INCIDENCE OF EMPLOYER CONTRIBUTIONS TO SOCIAL SECURITY IN JAPAN

This paper reappraises Tachibanaki and Yokoyama (2008)-an empirical analysis indicating no apparent backward shifting of employer social insurance contributions-by modifying their empirical strategy. First, we control for a spurious positive correlation between wages and employers' contribution rates by trend variables. Second, we utilize a cross-sectional variation in the contribution rate of workers' compensation insurance. Third, we exclude two industries from our sample to remove sampling errors in wages. Our results indicate that the social insurance burden shifts back onto employees to some extent, contrary to Tachibanaki and Yokoyama (2008). Our finding is consistent with other existing studies.