How are Hours Worked and Wages Affected by Labor Regulations?: The white-collar exemption and 'name-only managers' in Japan

This paper examines whether overtime regulations have a significant impact on the hours worked and hourly wages, by focusing on so-called name-only managers in Japan. The term name-only manager refers to an employee who has essentially the same job description as other employees, but who is designated by the company as a manager to exempt them from overtime regulations. As the name implies, the only difference between those managers and other employees is in the applicable regulations on working time. Using longitudinal data, our main results from matching estimation indicate no significant difference in hourly wage or hours worked between the two groups. This implies that name-only managers' base salaries are sufficiently higher to compensate for the loss of overtime pay, which supports the fixed-job model.