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Performance-pay and the gender wage gap in Japan

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  • Chiang, Hui-Yu
  • Ohtake, Fumio

Abstract

Using the Japanese Survey of Living Preferences and Satisfaction, we examine the gender wage gap by performance-pay group across the whole earnings distribution in Japan. The main finding is that a sharp acceleration of the gap at the top is not observed in Japan when we use a sample of all workers. However, a glass ceiling effect is observed for white collar workers who do not receive performance-based pay. On the other hand, the feature of maintaining a raw gender wage gap at about the same level above the 60 percentile is observed for white collar workers who receive performance pay. In addition, we find that the raw gender wage gap among the performance-pay group is about 5–18 points greater across the wage distribution than that among the non-performance-pay group. A second finding is that after performing the counterfactual decomposition analysis introduced by Machado and Mata (2005), differences in promotion between women and men explain the gender wage gap at the top of the distribution for non-performance pay workers. On the other hand, the gender difference for those working in large companies explained the gender wage gap at the top distribution for performance pay workers.

Suggested Citation

  • Chiang, Hui-Yu & Ohtake, Fumio, 2014. "Performance-pay and the gender wage gap in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 34(C), pages 71-88.
  • Handle: RePEc:eee:jjieco:v:34:y:2014:i:c:p:71-88
    DOI: 10.1016/j.jjie.2014.05.003
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    References listed on IDEAS

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    Citations

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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 for the Study of Labor (IZA).
    2. Katarzyna Bech & Joanna Tyrowicz, 2017. "Estimating gender wage gap in the presence of efficiency wages -- evidence from European data," GRAPE Working Papers 20, GRAPE Group for Research in Applied Economics.
    3. HARA Hiromi, 2016. "Glass Ceilings or Sticky Floors? An analysis of the gender wage gap across the wage distribution in Japan," Discussion papers 16099, Research Institute of Economy, Trade and Industry (RIETI).
    4. Masahiro Endoh, 2016. "The Effect of Offshoring on Skill Premiums: Evidence from Japanese Matched Worker-Firm Data," Keio-IES Discussion Paper Series 2016-005, Institute for Economics Studies, Keio University.
    5. KATO Takao & KODAMA Naomi, 2015. "Performance-related Pay and Productivity: Evidence from Japan," Discussion papers 15088, Research Institute of Economy, Trade and Industry (RIETI).
    6. Blind, Georg & Lottanti von Mandach, Stefania, 2017. "Secular trends in the Japanese labour market during the lost decades: A reply to Andrew Gordon," MPRA Paper 80812, University Library of Munich, Germany.
    7. Onozuka, Yuki, 2016. "The gender wage gap and sample selection in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 39(C), pages 53-72.
    8. Kato, Takao & Kodama, Naomi, 2017. "Women in the Workplace and Management Practices: Theory and Evidence," IZA Discussion Papers 10788, Institute for the Study of Labor (IZA).

    More about this item

    Keywords

    Glass ceiling; Gender wage gap; Performance pay; Counterfactual distribution;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J71 - Labor and Demographic Economics - - Labor Discrimination - - - Hiring and Firing

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