Earnings Patterns of Japanese Women: 1976-1988

Abstract

The structure of Japanese labor market and how it has changed in response to demographic and economic conditions has drawn considerable attention. Most of well-known characteristics of this system of industrial relations relate to lifetime employment contracts, seniority-based wage system, and widespread use of mandatory retirement. These characteristics apply to regular, full-time employees in Japan, primarily to male employees in large firms. Regular, full-time male employees have longer job tenure and more rapidly rising earnings than comparable workers in United States. Japanese women are much less likely to be employed under these lifetime contracts. Considerably less is known concerning structure of women's wages in Japan. This study provides new information concerning determinants of earnings for female workers in Japan by estimating earnings equations for full-time paid employees using two different data sources. First, Basic Survey of Wage Structure (BSWS) is used to examine earnings function of Japanese women. Using BSWS for 1976, 1981, and 1986, we estimate how determinants of earnings have changed during last decade. Second, 1988 National Survey on Family (hereafter referred to as the Family Survey) is employed to examine presence of children and resulting intermittent pattern of female labor supply on earnings. Key findings indicate that earnings of women rise with job tenure; however, magnitude of tenure effect on earnings has declined over time. Education increases earnings of women more than it does