Empowerment of Women in the Workplace and Labor Productivity: Which Company Policies Are Effective and Why

In this chapter, we will first demonstrate the positive correlation between the macro data of GDPGross Domestic Product (GDP) per hour worked in OECDOrganization for Economic Cooperation and Development (OECD) countries and the extent of empowerment of womenEmpowerment of women in member nations. Next, using the micro data of Japanese firms from the Research Institute of Economy, Trade and Industry’s International Comparative Survey on Work–Life Balance, we will analyze how, among Japanese firms, the company policy that encourages employees to “fulfill their potential regardless of gender,” (hereafter referred to as “the GEOGender equality of opportunity policy (GEO policy) policy”), policies that systematically promote employees’ work–life balance (WLB), and other company policies related to WLB or flexible workplaces affect the productivity and competitivenessProductivity and competitiveness of regular employees—a measure based Cobb-Douglas production function and gross profitGross profit per hour of weekly hours worked. A tobit regressionTobit regression model is employed as the analytical model, which uses the logarithm of gross profitGross profit per hour as the dependent variable and handles instances in which gross profitGross profit takes a negative value as censored observations. Moreover, although this chapter’s analysis is based on a cross-sectional survey, we will make assumptions that we employ explicit regarding the causal interpretation of the policy effects we find in our analyses by taking into account the possible presence of unobserved confounders. The primary findings obtained from these analytical results of Japanese firms are as follows. Although the proportion of college graduates among male regular employees has a strong positive effect on productivity and competitivenessProductivity and competitiveness , the proportion of college graduates among female regular employees, on average, has no effect on productivity and competitivenessProductivity and competitiveness . Thus, Japanese firms are failing, on average, to utilize their female college graduate personnel. However, productivity and competitivenessProductivity and competitiveness are found to improve with the college graduation rate of female regular employees (1) in companies that possess a GEOGender equality of opportunity policy (GEO policy) policy—particularly, those employing more than 300 regular employees and that also possess the systematic WLB promotion policyWLB promotion policy —and (2) in companies that exhibit higher opportunities of female regular employees to become managers as indicated by a higher proportion of female managers for a given proportion of women among regular employees. In this regard those companies’ productivity and competitivenessProductivity and competitiveness are enhanced through the effective utilization of women with university degrees.