Do Work-Family Policies Reduce Women's Employment Opportunities? a Firm-Level Analysis from Japan

Cross-national studies of welfare states and gender inequality have reported some unanticipated adverse effects of work-family policies on women’s labor market attainment. The paradox is that countries with generous work-family policies exhibit a lower proportion of women in authority positions and a higher level of sex segregation than countries without such policies. In order to explain this paradox, scholars have argued that work-family policies may increase employers’ motivation to exclude women from lucrative jobs. This argument, however, has been left untested due to a lack of data about firm-level hiring and promotion. This paper tests the argument using firm-level data, allowing us to directly investigate within-firm changes in women’s employment and promotion after policy interventions to increase work-family benefits. We use the case of Japan, which constitutes a strategic research setting due to the Japanese government’s passage of a series of laws over the past two decades to increase work-family benefits. We analyze women’s hiring and promotion across 1,000 Japanese companies from 1987 to 2009, during which three policy interventions happened. Contrary to the argument of many cross-national studies, we do not find evidence that employers exclude women from hiring and promotion after policy interventions; in fact, they tend to hire and promote women more. We discuss how work-family policies may incentivize employers to more fully utilize female labor because the policies help women serve as long-term employees, which is especially important given the continued prevalence of internal labor markets in large Japanese firms.