Effects of Fiscal Policy on Employment under the Zero Lower Bound in Japan: An Empirical Investigation with Gender and Regional Heterogeneity

Tomomi Miyazaki (), Haruo Kondoh (), Huanhuan Guo () and Naoto Tanemoto ()
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Tomomi Miyazaki: Graduate School of Economics, Kobe University
Haruo Kondoh: Faculty of Law, Keio University
Huanhuan Guo: School of Business, Sanda University
Naoto Tanemoto: Graduate School of Economics, Kobe University/Policy Research Institute, Ministry of Finance, Japan

No 2524, Discussion Papers from Graduate School of Economics, Kobe University

Abstract: We examine the effects of fiscal policy on employment when short-term interest rates were stuck at the zero lower bound (ZLB) in Japan. To do this, we consider both gender and regional differences. Our empirical results demonstrate that regardless of specification, government consumption benefited Southern Kanto and Kansai during the ZLB period. We also robustly show that it created jobs for female workers in these two metropolitan areas under the ZLB environment. These results suggest that since employers expect employment recovery by virtue of fiscal expansion as a temporal phenomenon, they increase female employees, most of whom are part-time workers.

Pages: 51 pages
Date: 2025-12
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