Gender Wage Gap in Japan and Taiwan:
A Comparative Study of Low-fertility East Asian Countries

萩原 里紗（明海大学）
Risa Hagiwara (Meikai University)
hagiwara@meikai.ac.jp
佐藤 一磨（拓殖大学）
Kazuma Sato (Takusyoku University)
Abstract
This study examines differences in the factors of the gender wage gap in Japan andTaiwan. According to the World Economic Forum (2017) and the National Statistics of
the Directorate-General of Budget, Accounting and Statistics under the Executive Yuan
(2017), the gender wage gap in Japan is larger than that in Taiwan. Wage equality
between women and men for similar work (converted to female-to-male ratio) is 0.67 in
Japan and 0.84 in Taiwan. However, despite the similar ratios of female-to-male labor
force participation between Japan (0.78) and Taiwan (0.76), the gender wage gap does
not shrink easily, especially in Japan.
Japanese female workers find it difficult to enhance their careers, especiallyafter having children, and this difficulty also negatively affects the childbirth decision ofwomen who want to continue to work. On the other hand, most female workers continue
to work even after they get married or give birth in Taiwan, and this is a reason thegender wage gap in Taiwan is smaller than that in Japan. Nevertheless, for reasons thathave not yet been sufficiently examined, the gender wage gap still exists in Taiwan. Inaddition, the mechanism of low fertility is different from Japan.
This study uses the Blinder-Oaxaca decomposition method and two types ofmicro data: one from the Japan Household Panel Survey/Keio Household Panel Survey(JHPS/KHPS) 2004-2016 from the Panel Data Research Center (PDRC) at Keio
University and another from the Panel Study of Family Dynamics (PSFD) 1993-2016
from the Research Center for Humanities and Social Sciences in Academia Sinica. TheBlinder-Oaxaca decomposition method is widely used in studies related to wage gaps bysex and race. This method divides the wage differences into the “explained” and“unexplained” parts. The explained part refers to the differences that can be accounted
for by productivity characteristics and type of work, such as education level, work1

experience, employment type, occupation, and industry. On the other hand, theunexplained part, which is often regarded as a measure for discrimination, refers to theresidual part that cannot be accounted for by such differences in wage determinants.
This method enables us to reveal which factors widen the wage difference.
The results of the Blinder-Oaxaca decomposition show that the hourly wage
differences between women and men (male wage－female wage) is 0.232 in Taiwan (forwhich the ratio of the explained part is 3%) and 0.581 in Japan (for which the ratio ofexplained part is 53%). We also find that the positive impact of tenure on the genderwage gap is large in Japan. The coefficient of the explained part is 0.082 in Japan andonly 0.0153 in Taiwan. These results mean that Japanese female workers find it difficult
to increase their work experience because of career interruptions for marriage orchildbirth. The magnitudes of the wage penalty for marriage and childbirth areimportant factors to explain the gender wage gap. For Taiwan, another significant
variable in the explained part is number of employees. Its coefficient is smaller than thatof tenure and the significance level is 10 % so that we cannot conclude clearly the effectof number of employees increases the gap. In Japan, many variables widen the genderwage gap. The significant variables in the explained part are educational attainment,employment status, occupation, and number of employees. This result means that Japan
still faces many problems that widens the gap.
We also observe a significant negative impact of childbirth on the decision tocontinue working in Japan and Taiwan. In addition, a wage penalty for childbirth exists
in both Japan and Taiwan. The results of the quantile regression show that for Taiwan,
the impact of the wage penalty is significantly larger only in the low-wage group, and forJapan, there is also a statistically significant negative effect on wage in almost wagegroups. Thus, to shrink the gender wage gap, different approaches are needed in Japanand Taiwan. For Japan, it is necessary to establish an environment where women cancontinue to work, especially for high-wage earners, and for Taiwan, it is necessary todecrease the wage penalty of having children for low-wage earners.

JEL Classification Codes: J12, J13, J31
Keywords: Gender Wage Gap, Blinder-Oaxaca Decomposition, Work Experience,Marriage, Childbirth, Japan, Taiwan

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