Impacts of Companies’ Promotion of Work–Life Balance and the Restrictive Regular Employment System on Gender Wage Gap

This chapter examines whether certain firm policies regarding work–life balance and flexible work places increase women’s wages, thereby decreasing the gender wage gapGender 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 OpportunityGender equality of opportunity policy (GEO policy) (GEO) policy, (2) whether firms have systematic work–life balance (WLB) promotion policies in place, and (3) whether firms have work–location-restricted regular employmentRegular 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 biasSelection bias occurs because companies’ policies and measures are not randomly assigned. In this chapter, the selection biasSelection 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. (1) Compared with situations in which the GEOGender equality of opportunity policy (GEO policy) policy is not in place, women’s wages increase and the gender wage gapGender wage gap decreases in cases in which it is in place. (2) The effects of the presence of both the WLB promotion policyWLB promotion policy and work-location-restricted regular employmentRegular employment systems depend on the presence of the GEO policy. When the GEO policy is in place, the effects of both increase women’s wages and decrease the gender wage gapGender wage gap over and beyond the effects of the GEOGender equality of opportunity policy (GEO policy) policy. (3) When the GEO policy is not in place, the presence of work-location-restricted regular employmentRegular employment systems has no significant effect on the gender wage gapGender wage gap , whereas the presence of the WLB promotion policyWLB promotion policy actually increases the gender wage gapGender wage gap .