Labor supply behavior of married women for 1990's and 2000's in Japan ―Verifying Douglas Arisawa's first law―

Kazutomo KOMAE
The University of Tokyo, Graduate School of Economics
National Graduate Institute for Policy Studies, Intern

June 2021

SciREX Center

SciREX-WP-2021-#01

http://scirex.grips.ac.jp/en/resources/2020/SciREX_WP_2020_%235.pdf

This study examines the labor supply behavior of married women for the 1990s and 2000s in Japan through Douglas-Arisawa’s first law. According to Douglas-Arisawa’s first law, when the primary earner’s income is high, his/her family members’ employment rate would be low. First, it was observed that Douglas-Arisawa’s first law was consistently effective for the 1990s and 2000s in Japan. On the other hand, the elasticity of employment rate to husbands’ earnings has been smaller in 2007 than in 1992. The decline of elasticity relies on increasing wives’ opportunities and the rate to work as regular workers and continue working.

Although many studies that conduct estimation by reduced form assume log-linearity or
linearity, this study introduces squared terms to estimate the marginal income effect of
husbands’ earnings. This method for estimation makes clarify the heterogeneity of
magnitude of income effect in husbands’ income levels.Then marginal-effect curves were drawn using predicted values from the estimation for each subgroup generated by family-type and observed year. The result represents that marginaleffect curves of 2007 are above those of 1992, and all the marginal-effect curves have negative slopes. The former indicates that married women had to participate in the labor market on the wide range of husbands’ earnings. The latter indicates that the marginal negative effect of income was more elastic in higher-income groups.

At the end of the analyses, the relationship between earnings and the married rate is shown. There is a positive correlation between earnings of men and the married rate of men (no positive correlation between earnings of women and married rate of women). This relationship indicates that there is a social norm that a man needs to have enough earnings to get married in Japan. The norm makes a married woman lose the willingness to work if she married with a high-earnings-husband and results in keeping the negative elasticity (or marginal effect). In addition, the norm is not an absurd idea but the result of rational economic choice under the big difference of rate of return between men and women.