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Effect of Work–Life Balance Practices on Firm Productivity: Evidence from Japanese Firm-Level Panel Data

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  • Yamamoto Isamu

    (Faculty of Business and Commerce, Keio University, 2-15-45, Mita, Minato-ku, Tokyo 108-8345, Japan)

  • Matsuura Toshiyuki

    (Keio Economic Observatory, Keio University, 2-15-45, Mita, Minato-ku, Tokyo 108-8345, Japan)

Abstract

This article examines how firm practices that could contribute to worker attainment of work–life balance (WLB) affect the total factor productivity (TFP) of a firm, by using panel data of Japanese firms from the 1990s. We observed a positive correlation between the WLB practices and TFP among sampled firms. However that correlation vanished when we controlled for the unobserved firm heterogeneity, and we found no general causal relationship in which WLB practices increase firm TFP in the medium or long run. For firms with the following characteristics, however, we found positive and sizable effects: large firms, manufacturing firms, and firms that have exhibited labor hoarding during recessions. Since these firms are likely to incur large fixed employment costs, we infer that firms investing in firm-specific human skills or having large hiring/firing costs can benefit from WLB practices through a decrease in turnover or increase in recruiting effectiveness.

Suggested Citation

  • Yamamoto Isamu & Matsuura Toshiyuki, 2014. "Effect of Work–Life Balance Practices on Firm Productivity: Evidence from Japanese Firm-Level Panel Data," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 14(4), pages 1-32, October.
    • Handle: RePEc:bpj:bejeap:v:14:y:2014:i:4:p:32:n:14
    DOI: 10.1515/bejeap-2013-0186
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    Cited by:

    1. Hideo Noda, 2020. "Work–Life Balance and Life Satisfaction in OECD Countries: A Cross-Sectional Analysis," Journal of Happiness Studies, Springer, vol. 21(4), pages 1325-1348, April.
    2. Kuroda, Sachiko & Yamamoto, Isamu, 2018. "Good boss, bad boss, workers’ mental health and productivity: Evidence from Japan," Japan and the World Economy, Elsevier, vol. 48(C), pages 106-118.
    3. Broszeit, Sandra & Laible, Marie-Christine, 2017. "Examining the link between health measures, management practices and establishment performance," IAB-Discussion Paper 201726, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    4. Inha Oh & Won-Sik Hwang & Hong Jun Yoon, 2019. "The Role of Work-Family Balance Policy for Enhancing Social Sustainability: A Choice Experiment Analysis of Koreans in their Twenties and Thirties," IJERPH, MDPI, vol. 16(14), pages 1-15, July.
    5. Derek Kruse & Kristie Briggs & Eric J. Neuman, 2022. "Mitigating endogeneity in corporate social responsibility research: An investigation using a neoclassical production function," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(1), pages 3-15, January.
    6. Mamiko Takeuchi, 2021. "Effects of Work-life Balance Policies on Corporate Performance and the Promotion of Female Employee," International Journal of Business and Management, Canadian Center of Science and Education, vol. 13(10), pages 1-9, July.
    7. Kapo Wong & Alan H. S. Chan & Pei-Lee Teh, 2020. "How Is Work–Life Balance Arrangement Associated with Organisational Performance? A Meta-Analysis," IJERPH, MDPI, vol. 17(12), pages 1-19, June.
    8. Wang-Jin Yoo & Inha Oh, 2017. "Effect of Work-Family Balance Policy on Job Selection and Social Sustainability: The Case of South Korea," Sustainability, MDPI, vol. 9(5), pages 1-15, May.
    9. Sachiko Kuroda & Isamu Yamamoto, 2019. "Why Do People Overwork at the Risk of Impairing Mental Health?," Journal of Happiness Studies, Springer, vol. 20(5), pages 1519-1538, June.
    10. MATSUURA Toshiyuki, 2013. "Why Did Manufacturing Firms Increase the Number of Non-regular Workers in the 2000s? Does international trade matter?," Discussion papers 13036, Research Institute of Economy, Trade and Industry (RIETI).
    11. Kawaguchi, Akira, 2015. "Internal labor markets and gender inequality: Evidence from Japanese micro data, 1990–2009," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 193-213.

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