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

Takao Kato and Naomi Kodama

No 8189, IZA Discussion Papers from Institute of Labor Economics (IZA)

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.

Keywords: overtime restriction on women; natural experiment; labor market deregulation; female employment; Labor Standards Law (search for similar items in EconPapers)
JEL-codes: J16 J78 J81 J82 J88 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2014-05
New Economics Papers: this item is included in nep-lab and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - revised version published as 'Deregulating Overtime Hours Restrictions on Women and Its Effects on Female Employment: Evidence from a Natural Experiment in Japan' in: Oxford Bulletin of Economics and Statistics, 2018, 80 (4), 804-821

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