Economic Consequences of Single Mothers’ Regular Employment in Japan

Abstract

This article aims to examine the economic consequences of women’s regular employment in single-mother families, using the nationally representative datasets from the Employment Status Survey of 2007. The propensity score matching (PSM) method, which controls for the observed heterogeneity between those who work as regular employees and those who do not, provides the following main results. First, the single mother’s (re) entry into regular employment increases the average hourly wage by 32.0% and decreases the risk of income poverty by 36.5 to 39.5%. Second, we also find that the causal effects of regular employment on the hourly wage and earning poverty are limited among low-educated single mothers. Third, even if these single mothers succeed in engaging in regular employment, more than half of them cannot escape economic poverty by their own earnings alone. These results suggest that not only work-fare policies that help single mothers work as regular employees, but also those reducing disadvantages women commonly face in the Japanese labor market at the time of marriage and childbearing will be necessary to improve the economic situation of single-mother families.