Female Employment and Firm Performance: An empirical analysis using firm panel data

This paper overviews the situation of female employment in listed Japanese companies using firm-level panel data after the 2000s, and demonstrates whether those companies utilizing female employment earn higher profits. The estimation results of fixed effect models show that a higher female proportion among regular employees significantly raises a company's profit rates, as measured by the return on assets. Particularly, it is shown that those firms with a female proportion of 30% to 40%, as well as with a higher female proportion among employees in their 30s, tend to earn higher profits with all things equal. In addition, those firms with better work-life balance practices or higher turnover rates have higher profit rates. Although the female proportion among managerial employees has no effect on company profit, medium-sized companies or those with a higher retention rate of newly hired female college graduates tend to see positive effects of higher female manager proportions. These results imply that higher female proportions could increase a company's profit not only by the reduced personnel cost explained by Becker's discrimination theory but also by the increased productivity due to the utilization of female workers' higher ability and skills.