July 2006

IZA DP No. 2195: Working Hours in Japan: Who Is Time-Privileged?

In the U.S. the relationship between hours worked and employee earnings has been reversed. Whereas the highest earners used to work the shortest hours, now they work the longest hours. This study examines whether such a reversal has occurred elsewhere, namely, Japan. Since the early 1990s the Japanese government has sought to transform the country into a “lifestyle superpower” by trying to encourage more daily time for leisure and less time on the job. Analyzing data for 1976-2003, it is clear that scheduled and actual working hours did indeed fall after 1990. During the early years of the sample, 1976-89, the highest earners also worked the shortest hours, that is, high income workers were time-privileged. As working hours fell in the 1990s, the time privileges of the highest earners changed too. Specifically, the highest earners gained time advantages relative to the lowest earners but lost some advantages relative to the median.