Female Employment and the Possibility of Work Hours Reduction in Japan

Author Name YAMAMOTO Isamu (Faculty Fellow, RIETI)
Creation Date/NO. March 2016 16-J-019
Research Project The Effect of Diversity on Economic Growth and Business Competitiveness
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Based on the previous studies that point out long working hours practice as one of the obstacles in utilizing female employees in the Japanese labor market, this paper tries to identify how the long work hours of Japanese workers are determined in an effort to discuss how they can be changed. As demand side factors of long work hours, we focus on the large fixed cost of labor, inefficiency for human resource management, and market structure that brings about lower bargaining power of workers. As supply side factors, we focus on large preference for consumption (labor), small labor supply elasticity, psychological and personality trail, peer effect (negative externality), and promotion rat race. As a possibility to reduce long working hours, we then discuss promoting employment liquidity, increasing overtime premiums, exempting workers from overtime regulations, setting an upper limit of working time, and enhancing compliance of labor regulations.