Nonprofit wage premium in the Japanese child care market: evidence from employer–employee matched data¹

¹ The earlier version was published as Noguchi et al. (2003).

Abstract

Using unique employer–employee matched data, this study reveals the existence of a nonprofit wage premium in Japan's child care industry. Nonprofits reward experienced workers with higher education, associated with the quality of care, more than their for-profit counterparts.

Acknowledgements

This research originated in a study on Japan's child care conducted by the Price Policy Division of the Cabinet Office. We'd like to thank Mikio Kawa, Masahiro Hori, Heather Montgomery and Naohiro Yashiro for their useful comments. The views expressed in this article do not necessarily represent those of the Economic and Social Research Institute or of any other organizations.

Notes

² Ministry of Health, Labor and Welfare reports the number of those who are in the waiting lists is estimated to be 25 447 as of 1 April 2002. However, this number is usually considered to be much underestimated.

¹ The earlier version was published as Noguchi et al. (2003).

³ Some nonlicensed centres are entitled to receive subsidy if they satisfy the national minimum standard with respect to equipments and the number of workers per child which licensed facilities must obey. Thus, subsidized nonlicensed centres in our sample are more homogenous with the licensed, which enables us to examine a wage premium more purely.