Economies of Scale and Hospital Productivity: An empirical analysis of medical area level panel data

This paper estimates the total factor productivity (TFP) of hospitals by using panel data drawn from prefectures and secondary medical areas. The study focuses on the economies of scale at the medical area and hospital levels. It uses the average length of stay as a measure of medical quality. We avoid case-mix bias by using data from medical areas instead of those from the hospital level. We control unobservable regional characteristics by employing panel data estimation. We eliminate price disparities among regions by using quantity data. Our results show that hospital size affects productivity: the larger the hospital, the higher the productivity. The hospital-size effect is economically significant: hospital productivity increases by more than 10% when the size of the hospital doubles. The size effects are null when we do not control the average length of stay. The main policy implication is the clear fact that consolidating hospitals improves productivity.

Insecurity of Employment and Work-Life Balance: From the viewpoint of compensating wage differentials

This paper presents survey-based evidence on the "fair" compensating wage differentials for insecurity of employment and lack of work-life balance (WLB). We present facts about individual perceptions of the desirable compensating differentials and then estimate the effects of working hours and wages on job satisfaction. The fair wage premiums for insecurity of employment and lack of WLB are both around 10% to 20%. The actual relative wages of nonstandard workers seem to be lower than those in the hedonic equilibrium. If "short-hour regular jobs" are characterized by both strong employment protection and WLB, the relative wage discount of 10% to 20% coincides with the average worker's perception of fairness. Working hours have a negative effect on job satisfaction and the wage level has a positive effect on job satisfaction, but the magnitudes of the effects differ between male and female workers. In order to achieve diversity of working styles, work schedule flexibility should be accompanied by a wage adjustment, which would contribute to the adoption and diffusion of WLB practices.

Postgraduate Education and Human Capital Productivity in Japan

In advanced countries, including Japan, the number of workers with postgraduate degrees is increasing. These highly educated workers are important contributors to innovation. This paper, using published data from the Employment Status Survey, estimates standard wage functions to investigate the effects of postgraduate degree on productivity and the rate of return on postgraduate education. According to the analysis, wage premium for postgraduates relative to undergraduates is about 20% in Japan, which is comparable to the figures found in the United States and the United Kingdom. The premium is larger for female employees. Wage reduction after age 60 is smaller, and retirement age is higher for workers with postgraduate education. Considering the trend toward advanced technology and the growing demand for human capital, postgraduate education is becoming important to vitalize the Japanese economy. At the same time, expansion of postgraduate education may contribute to narrowing the wage gap between male and female workers and increasing labor force participation of elderly people.

Urban Density, Human Capital, and Productivity: An empirical analysis using wage data

Numerous studies have indicated that densely populated cities enhance the productivity of workers through knowledge spillover and superior matching with employers in the labor market. This paper quantitatively analyzes the relationship among urban density, human capital, and wages by using micro data from the Basic Survey on Wage Structure for the years from 1990 to 2009. According to the estimation of standard wage functions augmented with population density, the agglomeration premium is larger for workers with higher observable skills such as education, tenure, and potential experience, which suggests rapid learning and superior matching in densely populated cities. Under structural changes such as a declining population and the trend toward a knowledge-based service economy, forming densely populated areas by facilitating the migration of workers has desirable effects throughout Japan on both individual wages and firm productivity.

What Do Japanese Unions Do for Productivity?: An Empirical Analysis Using Firm-Level Data

This paper empirically analyzes the relationship between union presence and firm performance in areas such as productivity and profitability by using data on a large number of Japanese firms, covering both manufacturing and non-manufacturing industries. Results indicate that the presence of labor unions has large positive effects on productivity level and growth. The effects of union presence on wages are also positive and the magnitude is similar to that of productivity. I find no negative effect for the presence of unions on firm profitability. These results differ from studies in the U.S. The number of employees decreases more for unionized firms than non-unionized firms. Most of the difference in employment is attributable to the change in the number of part-time workers. In order to enhance the productivity of the service sector, close cooperation between management and unions is required.

Stock Options and Productivity: An empirical analysis of Japanese firms

This paper analyzes the relationship between the use of stock options and productivity by employing firm-level panel data from the Basic Survey of Japanese Business Structure and Activities. According to the analysis, the use of stock options has a positive impact on firm productivity. Productivity steadily increases after the adoption of stock options. In addition, we found suggestive evidence that R&D investment increases after the introduction of stock options. These results imply that the deregulation on the use of stock options in 1997 and the subsequent legal reforms have had positive contributions to the productivity performance of Japanese firms.

Economies of Density and Productivity in Service Industries: An Analysis of Personal-Service Industries Based on Establishment-Level Data

The purpose of this paper is to investigate the basic facts of service industry productivity, such as economies of scale, economies of scope, and economies of density in Japan. Specifically, by using establishment-level data on personal-service industries in which the simultaneity of production and consumption is especially prominent, the paper estimates production functions both for value-added and physical output measures. Key findings from the analysis are as follows: 1. In almost all the examined service industries, economies of scale in terms of establishment size and firm size, and economies of scope are found. 2. In almost all the examined service industries, significant economies of population density are observed, with productivity increases of 10%-20% when municipality population density doubles. The sizes of these coefficients are substantially larger than those observed in manufacturing industries for which sales destinations are far less restricted geographically; demonstrating demand density's importance to the productivity of service industries. 3. The above findings are confirmed by estimation using measures of physical output instead of the amount of value added. These findings suggest the possibility that consolidation and expansion at an establishment level, as well as multi-store and chain store operations at a firm level, may help improve the productivity of personal-service industries. Formation of population-dense areas is also suggested, as this would have a positive effect on productivity.

Demand Fluctuations and Productivity of Service Industries

The purpose of this paper is to investigate empirically the relationship between demand fluctuations and productivity of service industries. Specifically, by using unique establishment-level data on service industries in Japan, this paper estimates production functions for six narrowly defined personal-service industries. In almost all the examined service industries, statistically and economically significant negative effects of demand variation on establishment-level productivity are found. This result suggests dispersing holidays may have positive effects on the productivity of service industries.

Population Density and Efficiency in Energy Consumption: An empirical analysis of service establishments

The achievement of both sustainable economic growth and reductions in CO2 emissions has been an important policy agenda in recent years. This study, using novel establishment-level microdata from the Energy Consumption Statistics, empirically analyzes the effect of urban density on energy intensity in the service sector. According to the analysis, the efficiency of energy consumption in service establishments is higher for densely populated cities. Quantitatively, after controlling for differences among industries, energy efficiency increases by approximately 12% when the density in a municipality population doubles. This result suggests that, given a structural transformation toward the service economy, deregulation of excessive restrictions hindering urban agglomeration, and investment in infrastructure in city centers would contribute to environmentally friendly economic growth.

Working Hours of Part-timers and the Measurement of Firm-level Productivity

This paper empirically quantifies what effect the data availability on part-timers' firm-level working hours may have on the accuracy of productivity measurement by using a data set on a large number of Japanese firms. Despite the practical importance of part-time workers in productivity measurement, this issue has not been considered seriously in past empirical studies. According to the analysis of this paper: (1) firm-level working hours of part-timers are quite heterogeneous even within the same industry; (2) when using industry average working hours, the bias of measured productivity is around 4% at the sample mean and from 1% to 2% at the sample median. The biases are especially large for service industries such as restaurant, hotel, and retail trade, where the part-time ratio is high; (3) however, the correlation between measured productivities using industry average working hours and those using firm-level hours is very high. This suggests there is only a small mismeasurement when using industry aggregate data in analyzing effects of firm characteristics or policy measures on productivity; (4) it is desirable to calculate full-time and part-time hours separately in productivity analyses covering service industries. In considering the importance of planning a valid economic growth strategy, enriching firm-level statistics is a cost-effective investment.