Wage Gap between Unlimited-type Regular Workers and Limited-type Regular Workers in Japan

Author Name YASUI Kengo (Aoyama Gakuin University) / SANO Shinpei (Chiba University) / KUME Koichi (Recruit Works Institute) / TSURU Kotaro (Faculty Fellow, RIETI)
Creation Date/NO. November 2016 16-J-061
Research Project Reform of Labor Market Institutions
Download / Links


The working conditions of "limited-type regular workers"--regular workers with limited location of workplace, scope of work, working hours, or overtime hours--have not been clearly analyzed despite increasing awareness and attention in Japan. We examine the differences in monthly earnings and hourly wages between unlimited regular workers and limited-type regular workers. We then investigate the extent to which human capital and occupation explain the wage gap between them by applying the Blinder-Oaxaca decomposition method using a web-based survey. We find that monthly earnings of the location-of-workplace-limited workers and the scope-of-work-limited workers are 14.1% and 6.5% lower than that of unlimited workers, respectively. The monthly earning difference between location-of-workplace-limited workers and unlimited workers is explained by gender and working hours. In the case of scope-of-work-limited workers, the difference is explained by working hours and types of occupation. The monthly earnings of either working-hours-limited workers or overtime-hours-limited workers are not statistically different from that of unlimited workers. In contrast, the hourly wage of limited workers is higher than that of unlimited workers. This hourly wage premium is not explained by the difference in individual characteristics. Results from quantile regression show that the hourly wage premium of limited workers is larger in the high quantile of wage distribution. These results indicate that the earnings and wage conditions of limited workers are not disadvantageous to the conditions of unlimited workers.