Firms’ demand for work hours: Evidence from matched firm-worker data in Japan

Sachiko Kuroda and Isamu Yamamoto

Journal of the Japanese and International Economies, 2013, vol. 29, issue C, 57-73

Abstract: Using information on Japanese males’ work hours and the matched firms’ characteristics, this paper investigates whether the number of hours worked is determined by demand-side factors and tries to offer a possible explanation of why Japanese males tend to work longer on average, than their counterparts in other countries. Based on an empirical framework in which each firm sets a minimum boundary of work hours and where workers hired by the firm are required to put in at least the minimum hours, we found that the minimum requirement depends on each firm’s fixed costs of labor. Specifically, firms that tend to hoard labor during recessions, presumably because of higher fixed costs, require incumbent workers to work longer hours during normal times. Since Japanese firms have long been considered as incurring high fixed costs to train workers, we interpret the long work hour requirement as a rational strategy for Japanese firms in protecting high-skill-accumulated workers from dismissal. In other words, the long work hours of Japanese males reflect firms’ long-term employment practices, a typical feature of the Japanese labor market.

Keywords: Labor demand; Desirable work hours; Work hour constraints; Fixed costs of labor; Work-life balance (search for similar items in EconPapers)
JEL-codes: J22 J23 J24 J32 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:29:y:2013:i:c:p:57-73

DOI: 10.1016/j.jjie.2013.06.005

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