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

Sachiko Kuroda, Isamu Yamamoto

Research output: Contribution to journalArticle

10 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)57-73
Number of pages17
JournalJournal of The Japanese and International Economies
Volume29
DOIs
Publication statusPublished - 2013 Sep 1

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Keywords

  • Desirable work hours
  • Fixed costs of labor
  • Labor demand
  • Work hour constraints
  • Work-life balance

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations

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