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Labor Market Deregulation and Female Employment: Evidence from a Natural Experiment in Japan

Author

Listed:
  • Kato, Takao

    (Colgate University)

  • Kodama, Naomi

    (Hitotsubashi University)

Abstract

This paper provides novel evidence on the causal effect on female employment of labor market deregulation by using the 1985 amendments to the Labor Standards Law (LSL) in Japan as a natural experiment. The original LSL of 1947 prohibited women from working overtime exceeding two hours a day; six hours a week; and 150 hours a year. The 1985 amendments exempted a variety of occupations and industries from such overtime restriction on women. We first define "jobs" using an industry by occupation matrix. For each job (close to 5,000 jobs in total), we carefully identify whether or not it was made exempt from the overtime restriction on women by the 1985 amendments. Applying a difference-in-difference model to census data, we find a statistically significant and economically meaningful impact on female employment of this particular piece of labor market deregulation. Furthermore the 1985 treatment is found to have a lasting and growing impact on female employment. Our finding is consistent with the recent literature that points to the importance of paying particular attention to the issues surrounding working hours when policymakers design public policy to promote female employment.

Suggested Citation

  • Kato, Takao & Kodama, Naomi, 2014. "Labor Market Deregulation and Female Employment: Evidence from a Natural Experiment in Japan," IZA Discussion Papers 8189, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp8189
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    References listed on IDEAS

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    Cited by:

    1. Kato, Takao & Kodama, Naomi, 2015. "Work-Life Balance Practices, Performance-Related Pay, and Gender Equality in the Workplace: Evidence from Japan," IZA Discussion Papers 9379, Institute of Labor Economics (IZA).
    2. Hamermesh, Daniel S. & Kawaguchi, Daiji & Lee, Jungmin, 2017. "Does labor legislation benefit workers? Well-being after an hours reduction," Journal of the Japanese and International Economies, Elsevier, vol. 44(C), pages 1-12.
    3. Takao Kato & Naomi Kodama, 2018. "The Effect of Corporate Social Responsibility on Gender Diversity in the Workplace: Econometric Evidence from Japan," British Journal of Industrial Relations, London School of Economics, vol. 56(1), pages 99-127, March.
    4. Thomas Flochel & Yuki Ikeda & Harry Moroz & Nithin Umapathi, 2014. "Macroeconomic Implications of Aging in East Asia Pacific," World Bank Publications - Reports 23026, The World Bank Group.
    5. KATO Takao & KODAMA Naomi, 2016. "Corporate Social Responsibility and Gender Diversity in the Workplace: Evidence from Japan," Discussion papers 16063, Research Institute of Economy, Trade and Industry (RIETI).

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    More about this item

    Keywords

    overtime restriction on women; natural experiment; labor market deregulation; female employment; Labor Standards Law;
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • J81 - Labor and Demographic Economics - - Labor Standards - - - Working Conditions
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy

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