Preferred Work Hours of Japanese, UK, and German Workers: Estimating labor supply elasticity based on hypothetical questions

Author Name KURODA Sachiko  (The University of Tokyo) /YAMAMOTO Isamu  (Keio University)
Creation Date/NO. March 2011 11-J-033
Research Project International Comparison of Measures to Improve Work-Life Balance and Consideration of Challenges Facing Japanese Companies
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This paper examines how preferences on work hours would differ among Japanese, UK, and German workers by examining hypothetical questions in comparable multi-country surveys. Our findings are as follows: First, Japanese workers not only work longer hours but also prefer to work significantly longer hours than their UK and German counterparts. Second, both wage elasticity and income elasticity of Japanese workers are the lowest among the three countries; that is, Japanese workers would not change their preferred work hours in response to changes in their wages or non-labor incomes. Third, we found that both the actual number of hours worked and the preferred number of hours to work are significantly greater for those working at the workplaces where working overtime and working on holidays are highly evaluated. Fourth, more than 40 percent of total variation observed across individuals in terms of preferred work hours can be attributed to workplace affiliation. These results indicate that although the lower labor supply elasticity of Japanese workers suggests a smaller change in preferred work hours in response to changes in wages or income, it may be possible to alter Japanese workers' preference regarding the number of hours to work depending on the way in which human resources are managed and/or on the nature of the workplace environment, as individual preferences are affected by workplace characteristics.