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Compliance Costs of Regulations and Productivity

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  • MORIKAWA Masayuki

Abstract

This study proposes a new approach of measuring the compliance costs of rules and regulations by focusing on labor input and estimating compliance costs based on a survey of workers in Japan. According to the results, the working hours required to comply with the rules and regulations account for over 20% of the total labor input. This cost is higher in the finance and insurance industry, followed by health and welfare; moreover, it is higher in large firms. A large proportion of the working hours of high-wage workers are devoted to compliance tasks. If these costs were halved, overall economic productivity would increase by approximately 8%. This suggests the importance of reducing costs through deregulation and digitalization.

Suggested Citation

  • MORIKAWA Masayuki, 2022. "Compliance Costs of Regulations and Productivity," Policy Discussion Papers 22025, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:polidp:22025
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    File URL: https://www.rieti.go.jp/jp/publications/pdp/22p025.pdf
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