Gender Inequality in the Labor Market by Occupational Skills and Sex Segregation: Insights from Japanese O-NET Matched Data

Abstract

The gender wage gap in Japan has declined, while women earn less than men by about 24%. A small number of literature that examine the Japanese case have suggested that fewer women in highly skilled professional occupations with a smaller gender wage gap explains part of the gender wage gap. These studies, however, only provided limited speculation that occupational distribution by sex is associated with skill requirements in a given occupation. The current study draws data from the Japanese version of O-NET published in 2020 and offered wage collected by an administrative survey to document the relationship between occupational skills and occupational sex segregation by matching the information with census occupations. We found the following results. First, a higher proportion of women in a given occupation is associated with the larger demand for care skills, while a lower proportion of women (higher proportion of men) is associated with demands for math, technical, and managerial skills. Second, regardless of types of skills, the higher skill requirements are associated with a higher hourly wage. Third, the higher the female ratio, the lower the hourly wage is, even if keeping the required skills constant. These results support the devaluation hypothesis in the sense that female-dominated occupations tend to be less valued by employers, making their wages lower. We discuss it is critical to simultaneously consider occupational sex segregation and skills requirements for occupations for understanding the source of the persistent gender wage gap in Japan.