TITLE:
An Empirical Analysis of Substitution and Complementarity of Gender Labor Demand of Enterprises in Japan, Korea, and China: With a Factor Decomposition of Gender Wage Differentials
AUTHORS:
Hiromi Ishizuka
KEYWORDS:
Labor Demand, Complementarity, Substitution, Women, Men, Gender Wage Differentials, Japan, South Korea, China
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.10,
June
26,
2018
ABSTRACT: The purpose of this study is the effect of expansion
of female labor demand on male labor demand for labor market reform to
facilitate Japanese economic
development. Firstly, the estimates using Hicks’ (1970) partial elasticity of complementarity and Allen’s
(1938) partial elasticity of substitution revealed an increase in male labor
demand when female labor demand increased in all three countries. The results were a relationship of
complementarity in labor demand between male and female regular employees in
the order of China, South Korea, Japan. However, a push factor or a pull factor is assumed to make up a complementarity relationship.
Therefore secondly,
the factor decomposition analysis of wage gap is used to investigate which
factors are applicable. The gender wage gap consists of economic rationality
and economic irrational discriminatory [Neumark (1988); Oaxaca and Ransom (1994)]. The gap was confirmed
in all three countries. Although
the actual gender average wage difference was small in China, “discriminatory
preference theory” was suggested that there is underpayment of women in Japan and Korea. In
Japan, as women have a high potential labor force participation rate, expansion
of female labor demand seems promising as an economic policy, not least because
of the declining population. Labor-related economic policies are needed, such
as the creation of a fluid labor market in China, or the implementation of
effective policies in Korea.