State Dependence in Labour Force Participation of Married Women in Japan

This paper investigates state dependence in labour participation by married women in Japan. We statistically investigate whether true state dependence, in which preferences, abilities, or constraints on future decisions are altered by experiencing certain events, exists in the choice between regular and non-regular work (part-time, contract, or other non-regular work). The empirical results suggest significant true state dependence for the choice of regular and non-regular work. This significant effect of true state dependence on regular work justifies stepping stone policies from nonparticipation or non-regular work to regular work or maintenance policies to support participation in temporary non-regular work. On the other hand, the significant effect of true state dependence on non-regular work indicates that non-regular work constrains the ability or preference of married women to participate in regular work. In this sense, non-regular work is exclusionary. This result suggests that policies are needed to support the movement of non-regular workers into regular work.