Factors in the Wage Differential between Standard and Nonstandard Employment: A comparison of Japan, South Korea, and Taiwan

Abstract

This chapter identifies primary factors that lower wages of nonstandard employment in Japan. It analyzes the situation in Japan and conducts the same analyses for South Korea and Taiwan. While our main interest lies in Japan, a comparison with these countries gives us a deeper understanding of Japanese society. The chapter discusses that there are a number of major differences with regard to nonstandard employment. Through a comparison with these countries, it highlights the distinguishing features of Japanese nonstandard employment. The chapter examines five factors: the balance of supply and demand in the labor force, human capital, and the occupational characteristics that make up nonstandard employment, sexual discrimination, and discrimination towards nonstandard employment itself. It uses Oaxaca-Blinder decomposition to resolve the factors involved in the wage differential between nonstandard and standard employment. In Japan, the wage differential between standard and nonstandard employment is larger than that in South Korea. Keywords: balance of supply; human capital; Japanese nonstandard employment; Oaxaca-Blinder decomposition; occupational characteristics; sexual discrimination; South Korea; Taiwan; wage differential