Skills and Life Satisfaction of Regular Workers with Diversified Working Styles: An empirical analysis using micro data from Japan

Author Name KUME Koichi  (Recruit Works Institute) /TSURU Kotaro  (Faculty Fellow, RIETI) /TODA Akihito  (Recruit Works Institute)
Creation Date/NO. May 2015 15-J-020
Research Project Reform of Labor Market Institutions
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To maintain work-life balance, the introduction of "limited regular workers"—regular workers whose scope of work or location of workplace is limited—is highly expected in Japan. On the other hand, there are concerns that limited work conditions may cause disadvantages for workers in developing skills, which may result in lower wages and lower life satisfaction. In this paper, we analyze the relationship between diversified working styles and skill accumulation. We also evaluate the monetary value of limited work conditions by using the life satisfaction approach.

We found that a lack of opportunity to develop skills deteriorates both job satisfaction and life satisfaction. The estimated monetary value of job satisfaction without opportunities to develop skills is 1,233.3 yen per hour (which is equivalent to 72.4% of average hourly wage). That of life satisfaction is 808 yen per hour (which is equivalent to 47.4% of average hourly wage). Those values are 2-3 times larger than those of disutility from overtime work or reshuffling/transfer. Compared to men, women suffer more from overtime work or reshuffling/transfer. The result implies that introducing a limited regular worker system may be more effective for women than men in terms of life satisfaction.