TY - JOUR
T1 - Effect of work-life balance practices on firm productivity
T2 - Evidence from Japanese firm-level panel data
AU - Yamamoto, Isamu
AU - Matsuura, Toshiyuki
N1 - Funding Information:
Acknowledgment: We are grateful to the institutes for their support. We thank Fumio Ohtake, Hank Farber, Lisa Kahn, Takao Kato, Sachiko Kuroda, Masako Kurosawa, Masaaki Mizuochi, Emiko Takeishi, Yukiko Yokoyama, as well as the member of the RIETI project and the participants of the 14th Labor Economics conference as well as Trans-Pacific Labor Seminar 2012, for their valuable comments. Because the data used in this study were obtained only by signing a confidentiality agreement, the authors are unable to release them. A data appendix with additional results, and copies of the computer programs used to generate the results presented in the paper, are available from the first author. This research is supported by the Japanese government’s Grants-in-Aid for Scientific Research [C] (Japan Society for the Promotion of Science; Research No. 23530289).
Publisher Copyright:
© 2014 by De Gruyter.
PY - 2014/10/1
Y1 - 2014/10/1
N2 - This article examines how firm practices that could contribute to worker attainment of work-life balance (WLB) affect the total factor productivity (TFP) of a firm, by using panel data of Japanese firms from the 1990s. We observed a positive correlation between the WLB practices and TFP among sampled firms. However that correlation vanished when we controlled for the unobserved firm heterogeneity, and we found no general causal relationship in which WLB practices increase firm TFP in the medium or long run. For firms with the following characteristics, however, we found positive and sizable effects: large firms, manufacturing firms, and firms that have exhibited labor hoarding during recessions. Since these firms are likely to incur large fixed employment costs, we infer that firms investing in firm-specific human skills or having large hiring/firing costs can benefit from WLB practices through a decrease in turnover or increase in recruiting effectiveness.
AB - This article examines how firm practices that could contribute to worker attainment of work-life balance (WLB) affect the total factor productivity (TFP) of a firm, by using panel data of Japanese firms from the 1990s. We observed a positive correlation between the WLB practices and TFP among sampled firms. However that correlation vanished when we controlled for the unobserved firm heterogeneity, and we found no general causal relationship in which WLB practices increase firm TFP in the medium or long run. For firms with the following characteristics, however, we found positive and sizable effects: large firms, manufacturing firms, and firms that have exhibited labor hoarding during recessions. Since these firms are likely to incur large fixed employment costs, we infer that firms investing in firm-specific human skills or having large hiring/firing costs can benefit from WLB practices through a decrease in turnover or increase in recruiting effectiveness.
KW - TFP
KW - fixed employment costs
KW - work-life balance
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U2 - 10.1515/bejeap-2013-0186
DO - 10.1515/bejeap-2013-0186
M3 - Article
AN - SCOPUS:84907669743
SN - 1935-1682
VL - 14
SP - 1677
EP - 1708
JO - B.E. Journal of Economic Analysis and Policy
JF - B.E. Journal of Economic Analysis and Policy
IS - 4
ER -