Izumi Yokoyama - Academia.edu (original) (raw)
Papers by Izumi Yokoyama
Journal of Public Economics, 2021
To control the spread of COVID-19, the national government of Japan abruptly started the closure ... more To control the spread of COVID-19, the national government of Japan abruptly started the closure of elementary schools on March 2, 2020, but preschools were exempted from this nationwide school closure. Taking advantage of this natural experiment, we examined how the proactive closure of elementary schools affected various outcomes related to children and family well-being. To identify the causal effects of the school closure, we exploited the discontinuity in the probability of going to school at a certain threshold of age in months and conducted fuzzy regression discontinuity analyses. The data are from a large-scale online survey of mothers whose firstborn children were aged 4 to 10 years. The results revealed a large increase in children's weight and in mothers' anxiety over how to raise their children. On the outcomes related to marital relationships, such as the incidence of domestic violence and the quality of marriage, we did not find statistically significant changes. These findings together suggest that school closures could have large unintended detrimental effects on non-academic outcomes among children.
ILR Review, 2019
The authors investigate the adjustments in employment of regular and non-regular workers, exploit... more The authors investigate the adjustments in employment of regular and non-regular workers, exploiting the exchange-rate fluctuation and heterogeneous dependence on international trade across firms as a source of exogenous variation. An analysis of panel data of Japanese manufacturers reveals that the appreciation of the Japanese yen spontaneously decreased the sales of exporters and the employment of non-regular workers, but it did not reduce the employment of regular workers. This finding provides support for the claim that firms are likely to adjust the employment of non-regular workers to absorb exogenous shocks and to insulate regular workers from the shocks in an uncertain business environment. In exploring the mechanism driving these results, the authors also find that exporters use the employment of non-regular workers and wages of regular workers as adjustment margins for the exchange-rate fluctuation to hoard regular workers, who presumably hold higher levels of firm-specifi...
Journal of the Japanese and International Economies, 2017
Using comprehensive government statistics, we show the extent to which wage inequality among men ... more Using comprehensive government statistics, we show the extent to which wage inequality among men and women has increased in Japan from 1989 to 2013, and the factors that are behind the changes using the Dinardo, Fortin and Lemieux (DFL) and Firpo, Fortin and Lemieux (FFL) decomposition methods. First, we find that the increase in the wage rate prevailed in all quantiles in both genders in the 1990s, and the real wage rate inequality was unchanged. Second, since the 2000s, the wage rate of the middle wage workers has been reduced more than that of any other group. Along with other developed countries, the decrease in wages of the middle class is observed even in Japan during the 2000s, although Japan is known for its solid middle class. Among women, the 90-50 gap increased while the 50-10 gap decreased, which resulted in the unchanged overall inequality for female workers. Finally, our exercise using the FFL decomposition method reveals the contemporaneous occurrence of the decrease in the return on general human capital of males and top females and the increase in the return of firm-specific human capital among male workers with a high wage rate. This suggests that Japanese firms undermined employee involvement and problem solving activities at the grassroots level, which is considered as one of the key elements of Japanese employment system. Moreover, our findings suggest that Japanese firms invest in just a few selected able workers, regardless of their age, because they no longer have enough reserves to invest in all of their employees.
In 2004, Japan abolished part of its spousal exemption regulations. This paper examines, on theor... more In 2004, Japan abolished part of its spousal exemption regulations. This paper examines, on theoretical and empirical levels, the effects of this tax reform on the income of married women, allowing for heterogeneous effects across income distribution. The empirical results from quantile difference-indifference estimations and novel decomposition methods indicate that low-income wives increased their labor supply and incomes, in accordance with changes in tax incentives. In contrast, medium-and high-income wives, who were presumably unaffected by the tax reform, decreased their incomes in response to the upward trend of their husbands' incomes during the same period. I argue that this behavior of middle-to high-income wives is due to an increased awareness of the shape of the budget line that were less conspicuous under the previous tax regime.
Exploiting heterogeneous variations in labor cost increases due to Japan's 2003 social insurance ... more Exploiting heterogeneous variations in labor cost increases due to Japan's 2003 social insurance premium reform as a natural experiment, we estimate the impacts of the increased social insurance premiums on employment, working hours, and payroll costs. Using the difference in differences (DID) method with establishment fixed effects, we find that firms reduce the number of employees and increase average annual earnings from longer working hours in response to an exogenous increase in labor costs without productivity gains. Firms manage to pay for this increase in the average wage paid to the remaining workers by reducing the number of employees to keep total payroll costs unchanged. In contrast, since social insurance premiums are shared equally between employees and employers, firms pay the remaining half of the premiums with which that they are imposed. Our results imply that an increase in labor costs without productivity gain may reduce employment.
Despite severe economic damage, full-service restaurants and bars have been closed in hopes of su... more Despite severe economic damage, full-service restaurants and bars have been closed in hopes of suppressing the spread of SARS-CoV-2 worldwide. This paper explores whether the early closure of restaurants and bars in February 2021 reduced symptoms of SARS-CoV-2 in Japan. Using a large-scale nationally representative longitudinal survey, we found that the early closure of restaurants and bars decreased the utilization rate among young persons (OR 0.688; CI95 0.515-0.918) and those who visited these places before the pandemic (OR 0.754; CI95 0.594-0.957). However, symptoms of SARS-CoV-2 did not decrease in these active and high-risk subpopulations. Among the more inactive and low-risk subpopulations, such as elderly persons, no discernible impacts are observed in both the utilization of restaurants and bars and the symptoms of SARS-CoV-2. These results suggest that the early closure of restaurants and bars without any other concurrent measures does not contribute to the suppression of ...
In 2003, a total reward system was introduced for employee pension insurance and health insurance... more In 2003, a total reward system was introduced for employee pension insurance and health insurance in Japan. This reform increased the insurance premiums for bonuses from 2% to 21.87%, and decreased the premiums for monthly salary from 25.96% to 21.87%. As a result, the social insurance premium burden of some companies increased, while that of others decreased. The variation, depending on the difference in the bonus/monthly salary ratio before the introduction of the total reward system, allows us to measure the influence of the increased social insurance premium burden using a natural experiment. This paper provides new evidence on the possible effect that the 2003 total reward system had on the behavior of firms, specifically its impact on labor demand and wages. Consequently, many firms reduced the number of employees, increased the average number of working hours, and maintained the total number of working hours. In terms of the costs to firms, the increase in average monthly sal...
How do exchange rate fluctuations affect the employment of regular and non-regular workers in a s... more How do exchange rate fluctuations affect the employment of regular and non-regular workers in a segmented labor market? We investigate the effect of exchange rate fluctuations on the employment adjustment of regular and non-regular workers using heterogeneous dependence on international trade across firms for identification. The analysis of Japanese firm-level panel data reveals that appreciation of the yen decreases the employment of exporting firms. The adjustment elasticity of non-regular employment is about five times greater than that of regular employment. Regular employment reacts more to the permanent exchange rate shocks extracted by the Beverage and Nelson decomposition, whereas non-regular employment reacts less. The estimation results suggest a significant difference in adjustment costs between regular and non-regular employment in the segmented Japanese labor market.
IZA Journal of Labor Policy, 2017
This study analyzes the trade-off relationship between layoffs and wage cuts. If the introduction... more This study analyzes the trade-off relationship between layoffs and wage cuts. If the introduction of a performance-based payment system stimulates workers’ pecuniary-motivated minds, their morale can be damaged more severely by wage cuts than prior to the introduction thereof. Utilizing this idea, we demonstrate theoretically that the more heavily wages are based on performance, the more firms, fearing that workers’ morale will be damaged by wage cuts, try to avoid wage cuts and instead prefer layoffs. Next, we show empirically the trend whereby firms with performance-based payment systems are unlikely to implement wage cuts. Given this first-stage regression, the status of a performance-based payment system, based on the firm’s past decision and assured to be exogenous, is employed as an instrumental variable (IV) for wage cuts in a layoff regression model to overcome simultaneous bias. In the second-stage regression, the IV estimates for the impact of wage cuts on layoffs are sign...
Japan and the World Economy, 2019
Since the 1990s, firms in Japan have reduced their human capital investment in the workplace to m... more Since the 1990s, firms in Japan have reduced their human capital investment in the workplace to minimize costs. Moreover, in response to the increase in the number of non-regular employees and turnover rates, workers need to have greater incentive to make the self-motivated investment in themselves for their self-protection. In this study, we first estimate the effects of workers' selfmotivated investment in themselves on wage rates. Next, we explore who is likely to participate in which training type and accordingly estimate the effects of the self-motivated investment on wage rates by training type. Our estimates controlling for individual-level fixed-effects indicate that the return is significantly positive and particularly high for practical training related to workers' current jobs, and regular workers tend to self-select these higher-returns programs, while nonregular workers are more likely to enroll in lower-returns programs, such as schooling. This trend in investment in oneself could potentially increase the wage inequality between regular and nonregular workers through the self-selection of training types. Our estimates reveal that receiving the training and education benefit raises the likelihood for workers to participate in a high-return training program regardless of whether they are non-regular or regular workers. This suggests that government benefits on self-investment change workers' self-selection of training type and serve to promote practical trainings that lead to high returns.
IZA Journal of Labor Economics, 2014
This paper provides a theoretical and empirical analysis of the effect of performance-based layof... more This paper provides a theoretical and empirical analysis of the effect of performance-based layoffs on wage rigidity in the context of performance pay. In the model, it becomes optimal for firms to raise future regular pay to maintain workers’ current efforts, which results in downwardly rigid regular pay under the threat of performance-based layoffs. Furthermore, it becomes optimal for firms to base wages less on workers’ performance during recessions due to the lower value of productivity. Consequently, wages during recessions also become “rigid” (inflexible) with respect to performance. The Japanese panel dataset supported these theoretical implications.JEL codesJ30; J33; J63
![Research paper thumbnail of Nenkochingin ha seisansei to kairishiteiruka: Kogyochosa, chinginkozokihonchosa kohyo data niyoru jissho bunseki [in Japanese]](https://attachments.academia-assets.com/94890887/thumbnails/1.jpg)
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Japan's labor standard law defines weekly legal work hours, and employers must pay a 25percent wa... more Japan's labor standard law defines weekly legal work hours, and employers must pay a 25percent wage premium for overtime. The number of legal work hours was 48 in 1987 and gradually declined to 40 by 1997. During the corresponding period, the average weekly hours of work dropped from 45 to 41, suggesting the causal effect of legal regulation on the actual hours of work. Exploiting the different timing of the regulation change by industry and establishment size, this paper estimates the causal impact of legal work hour reduction on labor market outcomes. The analysis results indicate that a one-hour reduction of legal work hours led to a reduction of 0.14 actual hours worked, but it was not accompanied by a reduction in monthly cash earnings. The recruitment of new school graduates was suppressed in response to an increase in the hourly wage rate.
Wage increases, along with job tenure, are one of the most robust empirical regularities found in... more Wage increases, along with job tenure, are one of the most robust empirical regularities found in labor economics. Several theories explain these empirical regularities, and such theories offer sharp empirical predictions for the relation between productivity-tenure and wage-tenure profiles. The human capital model, with cost and benefit sharing between workers and employers, predicts a steeper productivity-tenure profile than wage-tenure profile. The matching quality model predicts that the two profiles will overlap. Theories that involve the information asymmetry between employers and employees predict a steeper wage-tenure profile than productivitytenure profile to induce workers' effort and enhance efficiency. This paper estimates the productivity-tenure profile and the wage-tenure profile by estimating the plant-level production function and the wage equation using employer-employee matched data from Japan. These estimations offer a comprehensive test for the relative applicability of the two theories on the wage-tenure profile. Estimation results indicate a steeper wage-tenure profile than productivity-tenure profile and point to the relative importance of the deferred wage payment contract.
Canadian Journal of Economics/Revue canadienne d'économique, 2008
Diverging economic inequality has become a common focus of economic debate in developed countries... more Diverging economic inequality has become a common focus of economic debate in developed countries. In particular, the recent experience of Japan has started attracting international attention. We take advantage of a rich micro-level data set from the Basic Survey on Wage Structure (1989-2003) to perform an in-depth analysis of the change in the inequality and distribution of the hourly wage. We observe that lower returns to education and years of tenure contribute to diminishing income disparity between groups for both sexes. A larger variance within a group contributes to the wage disparity for males, while an increased heterogeneity of workers' attributes contributes to the wage disparity for females. The Dinardo, Fortin, and Lemieux decomposition also confirms the basic findings from a parametric variance decomposition.
ILR Review, 2009
Japan's traditional long-term employment practice, loosely termed “lifetime employment,” once... more Japan's traditional long-term employment practice, loosely termed “lifetime employment,” once attracted much attention, but its fortunes have not been tracked since the 1990s. The authors use micro data from the Japanese government's Basic Survey on Wage Structure to estimate permanent full-time workers' tenure patterns in the years during and following Japan's decade-long recession. Mean tenure, they find, grew for both genders between 1990 and 2003. The main explanation for this trend was a changing relationship between tenure and the attributes of workers and firms, rather than changes in the attributes themselves—although the importance of the latter increased for some women. Beyond the tendency at the mean, the authors find substantial variation. Notably, workers who had gained employment protection under the traditional system, mostly in large firms, saw larger gains in mean tenure than did other workers. This divergence, the authors suggest, could eventually e...
![Research paper thumbnail of Nenkochingin ha seisansei to kairishiteiruka: Kogyochosa, chinginkozokihonchosa kohyo data niyoru jissho bunseki [in Japanese]](https://attachments.academia-assets.com/46148371/thumbnails/1.jpg)
](
Journal of Public Economics, 2021
To control the spread of COVID-19, the national government of Japan abruptly started the closure ... more To control the spread of COVID-19, the national government of Japan abruptly started the closure of elementary schools on March 2, 2020, but preschools were exempted from this nationwide school closure. Taking advantage of this natural experiment, we examined how the proactive closure of elementary schools affected various outcomes related to children and family well-being. To identify the causal effects of the school closure, we exploited the discontinuity in the probability of going to school at a certain threshold of age in months and conducted fuzzy regression discontinuity analyses. The data are from a large-scale online survey of mothers whose firstborn children were aged 4 to 10 years. The results revealed a large increase in children's weight and in mothers' anxiety over how to raise their children. On the outcomes related to marital relationships, such as the incidence of domestic violence and the quality of marriage, we did not find statistically significant changes. These findings together suggest that school closures could have large unintended detrimental effects on non-academic outcomes among children.
ILR Review, 2019
The authors investigate the adjustments in employment of regular and non-regular workers, exploit... more The authors investigate the adjustments in employment of regular and non-regular workers, exploiting the exchange-rate fluctuation and heterogeneous dependence on international trade across firms as a source of exogenous variation. An analysis of panel data of Japanese manufacturers reveals that the appreciation of the Japanese yen spontaneously decreased the sales of exporters and the employment of non-regular workers, but it did not reduce the employment of regular workers. This finding provides support for the claim that firms are likely to adjust the employment of non-regular workers to absorb exogenous shocks and to insulate regular workers from the shocks in an uncertain business environment. In exploring the mechanism driving these results, the authors also find that exporters use the employment of non-regular workers and wages of regular workers as adjustment margins for the exchange-rate fluctuation to hoard regular workers, who presumably hold higher levels of firm-specifi...
Journal of the Japanese and International Economies, 2017
Using comprehensive government statistics, we show the extent to which wage inequality among men ... more Using comprehensive government statistics, we show the extent to which wage inequality among men and women has increased in Japan from 1989 to 2013, and the factors that are behind the changes using the Dinardo, Fortin and Lemieux (DFL) and Firpo, Fortin and Lemieux (FFL) decomposition methods. First, we find that the increase in the wage rate prevailed in all quantiles in both genders in the 1990s, and the real wage rate inequality was unchanged. Second, since the 2000s, the wage rate of the middle wage workers has been reduced more than that of any other group. Along with other developed countries, the decrease in wages of the middle class is observed even in Japan during the 2000s, although Japan is known for its solid middle class. Among women, the 90-50 gap increased while the 50-10 gap decreased, which resulted in the unchanged overall inequality for female workers. Finally, our exercise using the FFL decomposition method reveals the contemporaneous occurrence of the decrease in the return on general human capital of males and top females and the increase in the return of firm-specific human capital among male workers with a high wage rate. This suggests that Japanese firms undermined employee involvement and problem solving activities at the grassroots level, which is considered as one of the key elements of Japanese employment system. Moreover, our findings suggest that Japanese firms invest in just a few selected able workers, regardless of their age, because they no longer have enough reserves to invest in all of their employees.
In 2004, Japan abolished part of its spousal exemption regulations. This paper examines, on theor... more In 2004, Japan abolished part of its spousal exemption regulations. This paper examines, on theoretical and empirical levels, the effects of this tax reform on the income of married women, allowing for heterogeneous effects across income distribution. The empirical results from quantile difference-indifference estimations and novel decomposition methods indicate that low-income wives increased their labor supply and incomes, in accordance with changes in tax incentives. In contrast, medium-and high-income wives, who were presumably unaffected by the tax reform, decreased their incomes in response to the upward trend of their husbands' incomes during the same period. I argue that this behavior of middle-to high-income wives is due to an increased awareness of the shape of the budget line that were less conspicuous under the previous tax regime.
Exploiting heterogeneous variations in labor cost increases due to Japan's 2003 social insurance ... more Exploiting heterogeneous variations in labor cost increases due to Japan's 2003 social insurance premium reform as a natural experiment, we estimate the impacts of the increased social insurance premiums on employment, working hours, and payroll costs. Using the difference in differences (DID) method with establishment fixed effects, we find that firms reduce the number of employees and increase average annual earnings from longer working hours in response to an exogenous increase in labor costs without productivity gains. Firms manage to pay for this increase in the average wage paid to the remaining workers by reducing the number of employees to keep total payroll costs unchanged. In contrast, since social insurance premiums are shared equally between employees and employers, firms pay the remaining half of the premiums with which that they are imposed. Our results imply that an increase in labor costs without productivity gain may reduce employment.
Despite severe economic damage, full-service restaurants and bars have been closed in hopes of su... more Despite severe economic damage, full-service restaurants and bars have been closed in hopes of suppressing the spread of SARS-CoV-2 worldwide. This paper explores whether the early closure of restaurants and bars in February 2021 reduced symptoms of SARS-CoV-2 in Japan. Using a large-scale nationally representative longitudinal survey, we found that the early closure of restaurants and bars decreased the utilization rate among young persons (OR 0.688; CI95 0.515-0.918) and those who visited these places before the pandemic (OR 0.754; CI95 0.594-0.957). However, symptoms of SARS-CoV-2 did not decrease in these active and high-risk subpopulations. Among the more inactive and low-risk subpopulations, such as elderly persons, no discernible impacts are observed in both the utilization of restaurants and bars and the symptoms of SARS-CoV-2. These results suggest that the early closure of restaurants and bars without any other concurrent measures does not contribute to the suppression of ...
In 2003, a total reward system was introduced for employee pension insurance and health insurance... more In 2003, a total reward system was introduced for employee pension insurance and health insurance in Japan. This reform increased the insurance premiums for bonuses from 2% to 21.87%, and decreased the premiums for monthly salary from 25.96% to 21.87%. As a result, the social insurance premium burden of some companies increased, while that of others decreased. The variation, depending on the difference in the bonus/monthly salary ratio before the introduction of the total reward system, allows us to measure the influence of the increased social insurance premium burden using a natural experiment. This paper provides new evidence on the possible effect that the 2003 total reward system had on the behavior of firms, specifically its impact on labor demand and wages. Consequently, many firms reduced the number of employees, increased the average number of working hours, and maintained the total number of working hours. In terms of the costs to firms, the increase in average monthly sal...
How do exchange rate fluctuations affect the employment of regular and non-regular workers in a s... more How do exchange rate fluctuations affect the employment of regular and non-regular workers in a segmented labor market? We investigate the effect of exchange rate fluctuations on the employment adjustment of regular and non-regular workers using heterogeneous dependence on international trade across firms for identification. The analysis of Japanese firm-level panel data reveals that appreciation of the yen decreases the employment of exporting firms. The adjustment elasticity of non-regular employment is about five times greater than that of regular employment. Regular employment reacts more to the permanent exchange rate shocks extracted by the Beverage and Nelson decomposition, whereas non-regular employment reacts less. The estimation results suggest a significant difference in adjustment costs between regular and non-regular employment in the segmented Japanese labor market.
IZA Journal of Labor Policy, 2017
This study analyzes the trade-off relationship between layoffs and wage cuts. If the introduction... more This study analyzes the trade-off relationship between layoffs and wage cuts. If the introduction of a performance-based payment system stimulates workers’ pecuniary-motivated minds, their morale can be damaged more severely by wage cuts than prior to the introduction thereof. Utilizing this idea, we demonstrate theoretically that the more heavily wages are based on performance, the more firms, fearing that workers’ morale will be damaged by wage cuts, try to avoid wage cuts and instead prefer layoffs. Next, we show empirically the trend whereby firms with performance-based payment systems are unlikely to implement wage cuts. Given this first-stage regression, the status of a performance-based payment system, based on the firm’s past decision and assured to be exogenous, is employed as an instrumental variable (IV) for wage cuts in a layoff regression model to overcome simultaneous bias. In the second-stage regression, the IV estimates for the impact of wage cuts on layoffs are sign...
Japan and the World Economy, 2019
Since the 1990s, firms in Japan have reduced their human capital investment in the workplace to m... more Since the 1990s, firms in Japan have reduced their human capital investment in the workplace to minimize costs. Moreover, in response to the increase in the number of non-regular employees and turnover rates, workers need to have greater incentive to make the self-motivated investment in themselves for their self-protection. In this study, we first estimate the effects of workers' selfmotivated investment in themselves on wage rates. Next, we explore who is likely to participate in which training type and accordingly estimate the effects of the self-motivated investment on wage rates by training type. Our estimates controlling for individual-level fixed-effects indicate that the return is significantly positive and particularly high for practical training related to workers' current jobs, and regular workers tend to self-select these higher-returns programs, while nonregular workers are more likely to enroll in lower-returns programs, such as schooling. This trend in investment in oneself could potentially increase the wage inequality between regular and nonregular workers through the self-selection of training types. Our estimates reveal that receiving the training and education benefit raises the likelihood for workers to participate in a high-return training program regardless of whether they are non-regular or regular workers. This suggests that government benefits on self-investment change workers' self-selection of training type and serve to promote practical trainings that lead to high returns.
IZA Journal of Labor Economics, 2014
This paper provides a theoretical and empirical analysis of the effect of performance-based layof... more This paper provides a theoretical and empirical analysis of the effect of performance-based layoffs on wage rigidity in the context of performance pay. In the model, it becomes optimal for firms to raise future regular pay to maintain workers’ current efforts, which results in downwardly rigid regular pay under the threat of performance-based layoffs. Furthermore, it becomes optimal for firms to base wages less on workers’ performance during recessions due to the lower value of productivity. Consequently, wages during recessions also become “rigid” (inflexible) with respect to performance. The Japanese panel dataset supported these theoretical implications.JEL codesJ30; J33; J63
Japan's labor standard law defines weekly legal work hours, and employers must pay a 25percent wa... more Japan's labor standard law defines weekly legal work hours, and employers must pay a 25percent wage premium for overtime. The number of legal work hours was 48 in 1987 and gradually declined to 40 by 1997. During the corresponding period, the average weekly hours of work dropped from 45 to 41, suggesting the causal effect of legal regulation on the actual hours of work. Exploiting the different timing of the regulation change by industry and establishment size, this paper estimates the causal impact of legal work hour reduction on labor market outcomes. The analysis results indicate that a one-hour reduction of legal work hours led to a reduction of 0.14 actual hours worked, but it was not accompanied by a reduction in monthly cash earnings. The recruitment of new school graduates was suppressed in response to an increase in the hourly wage rate.
Wage increases, along with job tenure, are one of the most robust empirical regularities found in... more Wage increases, along with job tenure, are one of the most robust empirical regularities found in labor economics. Several theories explain these empirical regularities, and such theories offer sharp empirical predictions for the relation between productivity-tenure and wage-tenure profiles. The human capital model, with cost and benefit sharing between workers and employers, predicts a steeper productivity-tenure profile than wage-tenure profile. The matching quality model predicts that the two profiles will overlap. Theories that involve the information asymmetry between employers and employees predict a steeper wage-tenure profile than productivitytenure profile to induce workers' effort and enhance efficiency. This paper estimates the productivity-tenure profile and the wage-tenure profile by estimating the plant-level production function and the wage equation using employer-employee matched data from Japan. These estimations offer a comprehensive test for the relative applicability of the two theories on the wage-tenure profile. Estimation results indicate a steeper wage-tenure profile than productivity-tenure profile and point to the relative importance of the deferred wage payment contract.
Canadian Journal of Economics/Revue canadienne d'économique, 2008
Diverging economic inequality has become a common focus of economic debate in developed countries... more Diverging economic inequality has become a common focus of economic debate in developed countries. In particular, the recent experience of Japan has started attracting international attention. We take advantage of a rich micro-level data set from the Basic Survey on Wage Structure (1989-2003) to perform an in-depth analysis of the change in the inequality and distribution of the hourly wage. We observe that lower returns to education and years of tenure contribute to diminishing income disparity between groups for both sexes. A larger variance within a group contributes to the wage disparity for males, while an increased heterogeneity of workers' attributes contributes to the wage disparity for females. The Dinardo, Fortin, and Lemieux decomposition also confirms the basic findings from a parametric variance decomposition.
ILR Review, 2009
Japan's traditional long-term employment practice, loosely termed “lifetime employment,” once... more Japan's traditional long-term employment practice, loosely termed “lifetime employment,” once attracted much attention, but its fortunes have not been tracked since the 1990s. The authors use micro data from the Japanese government's Basic Survey on Wage Structure to estimate permanent full-time workers' tenure patterns in the years during and following Japan's decade-long recession. Mean tenure, they find, grew for both genders between 1990 and 2003. The main explanation for this trend was a changing relationship between tenure and the attributes of workers and firms, rather than changes in the attributes themselves—although the importance of the latter increased for some women. Beyond the tendency at the mean, the authors find substantial variation. Notably, workers who had gained employment protection under the traditional system, mostly in large firms, saw larger gains in mean tenure than did other workers. This divergence, the authors suggest, could eventually e...