Utilization of Female and Foreign Employees among Japanese Firms: An empirical analysis using firm panel data

Author Name TAKAMURA Shizuka (Consulting Fellow, RIETI)
Creation Date/NO. June 2016 16-J-047
Research Project The Effect of Diversity on Economic Growth and Business Competitiveness
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This paper examines the various factors of companies which utilize female and foreign employees, using panel data of listed Japanese companies. Japanese female employees are usually recruited in the same manner as male employees; on the other hand, foreign employees are recruited in different ways and at different times. Although the situations of female employees and foreign employees are different, common factors seem to exist which promote and impede the utilization of both groups.

The estimation results from the panel analysis show that the female and foreign proportion among regular employees has fallen as the duration of male employees' employment period has risen, and that has increased in accordance with the job posting system. Long-term employment is a solid underpinning of Japanese human resource management and the principle of organizational norm which is constructed mainly based on Japanese male employees in a relatively predictable environment. Meanwhile, an enhanced flexible workplace environment tends to promote the utilization of female and foreign employees, and the negative effects of Japanese firms' human resource management are not denied as a whole. Since utilizing a diverse group of employees with a variety of skills and knowledge is important for creating innovative ideas, it would be beneficial for companies to review their human resource management practice.