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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
  • MATSUURA Toshiyuki

Abstract

This paper 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 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 characteristicsmdash;large, manufacturing, and have exhibited labor hoarding during recessionsmdash;we found positive and sizable effects. 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 an increase in recruiting effectiveness.

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Bibliographic Info

Paper provided by Research Institute of Economy, Trade and Industry (RIETI) in its series Discussion papers with number 12079.

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Length: 34 pages
Date of creation: Dec 2012
Date of revision:
Handle: RePEc:eti:dpaper:12079

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References

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  1. Matthew Gray & Jacqueline Tudball, 2004. "Family-friendly work practices: differences within and between workplaces," Labor and Demography 0405003, EconWPA.
  2. Richard Freeman & Kathryn Shaw, 2009. "International Differences in the Business Practices and Productivity of Firms," NBER Books, National Bureau of Economic Research, Inc, number free07-1.
  3. Amil Petrin & James Levinsohn, 2012. "Measuring aggregate productivity growth using plant-level data," RAND Journal of Economics, RAND Corporation, vol. 43(4), pages 705-725, December.
  4. Wooldridge, Jeffrey M., 2009. "On estimating firm-level production functions using proxy variables to control for unobservables," Economics Letters, Elsevier, vol. 104(3), pages 112-114, September.
  5. Nick Bloom & Tobias Kretschmer & John Van Reenan, 2009. "Work-Life Balance, Management Practices and Productivity," NBER Chapters, in: International Differences in the Business Practices and Productivity of Firms, pages 15-54 National Bureau of Economic Research, Inc.
  6. Morikawa, Masayuki, 2010. "Labor unions and productivity: An empirical analysis using Japanese firm-level data," Labour Economics, Elsevier, vol. 17(6), pages 1030-1037, December.
  7. Kawaguchi, Daiji, 2007. "A market test for sex discrimination: Evidence from Japanese firm-level panel data," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 441-460, June.
  8. Alex Bryson & Rafael Gomez & Tobias Kretschmer & Paul Willman, 2007. "The diffusion of workplace voice and high-commitment human resource management practices in Britain, 1984–1998," Industrial and Corporate Change, Oxford University Press, vol. 16(3), pages 395-426, June.
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Cited by:
  1. 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).

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