Gender Inequalities in the Japanese Workplace and Employment

As the opening to the book, this chapter reviews the current situation, marked by the very slow advancement of women’s participation in Japanese economic activities despite various types of legal support. The main factor attributed to this delay in promoting women’s participation is Japanese employment practices. To better understand the historical origins of these practices and of the significant delay in women’s participation, the author clarifies economic and cultural foundations of the so-called Japanese employment system. He addresses its problems referred to in this chapter as “rationality under specific premises,” the problem of “structural inertia” associated with the employment system constructed under the principle of “strategic rationality,” and the problem of the “traditional division of household labor between husband and wife” as imposed by society as a complement of the employment system. Based on those discussions, the aims of this book are explained. In addition, given the book’s focus on empirical analysis, this chapter also provides an explanation of the aims of, and the methodological background for, the analytical strategies employed in the book.

This chapter analyzes determinants of gender differences in the proportion of managers among white-collar regular workers by using linked data on employers and employees in Japanese firms. First, the chapter shows that the reasons for “having few or no female managers” given in response to employer surveys conducted by the Ministry of Health, Labour and Welfare, such as a “high rate of job quitting among women”, cannot be considered genuinely major causes, even though they are among the minor ones. This is because the proportion of managers among female college graduates is far lower than that among male high school graduates, even given the same number of years working for the current employer. The fundamental problem lies in “pre-modern” human-resource management whereby gender, as an ascribed status, is given greater weight than educational attainment in determining who will become managers. The chapter also shows that only about 20% of the gender difference in the proportion of managers is explained by the difference in human capital characteristics between men and women; that in order to become managers, long working hours seem to be required more for women than for men; that the proportion of managers increases for men and decreases for women, depending on the age of their last child, in a way that suggests a reinforcement of traditional gender roles by employers; and that firms with centers dedicated to promoting work–life balance among employees have smaller gender gaps in the proportion of managers.

In this chapter, an extremely uneven distribution of professional occupations that women enter is revealed and the problems associated with these biases are elucidated. Professions are classified into two types: Type 1 professions, which include three representative human service professions of high socioeconomic status—namely, medical doctors, dentists, college professors—and all professions that are not human service professions; and Type 2 professions, which include human-service professions other than medical doctors, dentists, and college professors. Both the United States and Japan have a large number of women employed in Type 2 professions and clerical jobs; however, Japan has a markedly lower proportion of women in Type 1 professions and managerial positions than the United States. Moreover, an examination of the gender wage gap by occupation shows that the differences between men and women are relatively small within Type 1 professions and managerial positions, and women’s average wages in Type 2 professions and clerical occupations are much lower than those of men within the same occupations and are significantly lower than men’s average wages in blue-collar occupations. Thus, women are subject to a two-fold wage disadvantage. On the one hand, the proportion of women is miniscule in occupations with relatively high wage and smaller gender wage gaps (Type 1 professions and managerial positions). On the other hand, the proportion of women is large in white-collar occupations exhibiting the largest wage gaps by gender (Type 2 professions and clerical occupations). Further, in this chapter, whether gender occupational segregation can be explained by gender disparities in human capital is analyzed. The results, although paradoxical, indicate that the gender equalization of human capital intensifies occupational gender segregation between men and women. This segregation occurs because the increases of women in female-dominated Type 2 professions and the decreases of women in non-service manual occupations in which women are already underrepresented—as a result of more human capital—outpace the increases of women in underrepresented Type 1 professions and managerial positions. In this chapter, theories on gender occupational segregation are also reviewed and their consistency with the empirical results is examined.

This chapter presents the results of the decomposition analysis of the gender income disparity among white-collar regular employees using the DFL model, which relies on propensity score standardization. First, the main results of the analysis show that six variables collectively explain 78% of the disparity. Gender differences in three human capital variables for age, educational attainment, and years of service account for 35% of the gender income disparity, whereas three variables for occupation, working hours, and positional rank account for additional 43%. Individually, gender differences in positional rank possess the strongest explanatory power. Next, the disparity in the portion that cannot be explained by gender differences in the six variables is analyzed. Also demonstrated is the degree by which decreases in gender income disparity vary among each of the categories of age, educational attainment, occupation, working hours, and positional rank given the hypothetical situations when human capital characteristics are equalized between men and women and when positional rank is also equalized between men and women. The following results were obtained. (1) The tendency for gender disparities in income to increase with age is mostly explained by increases in gender disparities in positional rank after the age of 40. (2) Most of the gender disparity in income among college graduates can be resolved by eliminating gender differences in years of service and positional rank, whereas most of the gender income disparity among advanced training school graduates can be gotten rid of by eliminating differences in positional ranks. However, a large portion of the gender disparity in income among high school graduates cannot be eliminated even with identical years of service and positional rank. (3) Large gender income disparities remain among professionals and among female-dominated clerical workers even when human capital and positional rank are equalized between men and women. (4) The realization of gender equality in income opportunities among men and women employed in the position of section chief (kacho) and above is much greater than those of lower positional ranks.

This chapter examines whether certain firm policies regarding work–life balance and flexible work places increase women’s wages, thereby decreasing the gender wage gap. In particular, this chapter focuses on the influence of (1) firms’ personnel policies that “encourage employees to fulfill their potential regardless of gender,” which hereinafter is referred to as the Gender Equality of Opportunity (GEO) policy, (2) whether firms have systematic work–life balance (WLB) promotion policies in place, and (3) whether firms have work–location-restricted regular employment systems. The linked survey data between Japanese firms and their employees taken from the 2009 International Comparative Survey on Work–Life Balance conducted by the Research Institute of Economy Trade and Industry are used in the analysis. A selection bias occurs because companies’ policies and measures are not randomly assigned. In this chapter, the selection bias caused by firm and employee characteristics is eliminated through the use of propensity-score weighting. Furthermore, the analysis takes into account unobserved heterogeneity in company characteristics and interprets the causal relationship of the analytical results accordingly. The analytical results are as follows.

In this chapter, we will first demonstrate the positive correlation between the macro data of GDP per hour worked in OECD countries and the extent of empowerment 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 GEO policy”), policies that systematically promote employees’ work–life balance (WLB), and other company policies related to WLB or flexible workplaces affect the productivity and competitiveness of regular employees—a measure based Cobb-Douglas production function and gross profit per hour of weekly hours worked. A tobit regression model is employed as the analytical model, which uses the logarithm of gross profit per hour as the dependent variable and handles instances in which gross 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 competitiveness, the proportion of college graduates among female regular employees, on average, has no effect on productivity and competitiveness. Thus, Japanese firms are failing, on average, to utilize their female college graduate personnel. However, productivity and competitiveness are found to improve with the college graduation rate of female regular employees (1) in companies that possess a GEO policy—particularly, those employing more than 300 regular employees and that also possess the systematic WLB 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 competitiveness are enhanced through the effective utilization of women with university degrees.

A widely held perception among managers at Japanese firms is that “human capital investment in women will be wasted because women quit when marrying or when having children” and that “women are less productive and less ambitious than men.” On the surface, these statements might appear to be the case. However, this problem is not the fault of female workers but a consequence of Japanese firms’ choices that create a self-fulfilling prophecy—for which this chapter presents the rationale. More specifically, the analysis relies on the game-theoretic model of Coate and Loury (CL) and provides two new solutions for breaking the self-fulfilling prophecy equilibrium not considered under the CL theory. Furthermore, the analysis modifies the CL theory—a statistical discrimination theory that integrates incentive problems—by formally theorizing incentive problems pertaining to indirect discrimination and presents new theoretical findings that are consistent with empirical facts regarding the gender disparity in the attainment of managerial and professional positions in Japan. Moreover, these mathematical theoretical models on discrimination clarify the importance of incentive problems in the promotion of gender equality in economic activities.

In this final chapter, we discuss the implications of the following eight specific problems based on the analytical results of the previous chapters: (1) the proportion of women in managerial positions and indirect discrimination; (2) statistical discrimination, the self-fulfilling prophecy, and the low productivity of female labor; (3) stereotyping women’s occupations; (4) long work hours and opportunities for women; (5) diversity management and policies for the empowerment of women in the workplace; (6) employment status and the wage gap; (7) application of the Act on the Promotion of Success in the Working Careers of Women; and (8) important points when considering gender equality of opportunity.