Professor, Keio University Faculty of Business and Commerce
Sachiko Kazekami
Labor Economics
Assumed current post in 2022, after serving as a full-time Lecturer and Associate Professor at the Chukyo University Department of Economics and an Associate Professor at the Keio University Faculty of Business and Commerce. Holds a PhD in Business and Commerce. “Linkage, sectoral productivity, and employment spread,” Structural Change and Economic Dynamics, 69, 2024; “Regional Differences in the Epidemic Shock on the Local Labor Market and its Spread,” LABOUR, 36(1), 2021; “Mechanisms to improve labor productivity by performing telework,” Telecommunications Policy, 44(2), 2020; “Local Multipliers, Mobility and Agglomeration Economies," Industrial Relations, 56(3), 2017; Labor Economics (coauthored with Atsushi Seike), Toyo Keizai, 2020; and others.
Studying the spillover effects of work: Empirical analysis in labor economics
Professor, Keio University Faculty of Business and Commerce Sachiko Kazekami
I specialize in the study of labor economics—that is, on working. Labor economics captures social phenomena in terms of the demand and supply of labor and elucidates questions such as why they occur and what issues they raise in terms of maximization of individual utility, profit-maximization behavior, and market equilibrium. You may have heard recently about subjects such as a labor shortage or generative AI. If each person acts in their own best interest, what are the implications for the labor supply of society as a whole of systems that would result in reduced pension benefits or increased social security contributions if someone worked more than they currently do? Another example is what kinds of work will firms automate, and to what extent, as they seek to increase profits, and how workers' ways of working will change as a result. I long have been interested in spillover, spread, or multiplier effects in labor economics. This is because people work in relation to others, and they indirectly affect even more people. At the same time, if spillovers are blocked because of geographical reasons or skill gaps, then the positive effects may not reach society at large. I study this area because I want to clarify the issues themselves and their contributing factors, and to find solutions.
Several years ago, I estimated the multiplier effects of how many jobs are created in sectors such as restaurants, hospitals, and retail that are primarily in demand in the region when a single job is created by starting a business or opening a new office. This means that the higher the income of the new jobs created, such as in the innovation sector, the more goods and services are consumed in the local market, and the more additional jobs are created. Based on the situation in which the Japanese economy is facing a population decline, I extend my analysis from existing research to the fact that the multiplier effect of employment depends on the mobility of people and the degree of agglomeration economy. In addition, Professor Gagliardi of Bocconi University, Professor Moretti of the University of California, Berkeley, and Associate Professor Serafinelli of the University of Essex are conducting an international comparison on the same topic using data from six countries in Europe, America, and Asia. I assisted them with data on Japan.
In the above estimation, I analyzed the multiplier effects of employment through the consumption side. Last year, I estimated multiplier effects from supply side, using prefectural data, to see how high-productiveity sectors amplify other sectors through their production processes, and how they affect workers' income and job creation. If the multiplier effect in the production process is greater than one, then they push up levels of productivity and worker income in the prefecture as a whole. In each prefecture, the total of the multiplier effects of individual sectors was about two, so that average productivity was amplified through the production process. Furthermore, I found that the multiplier effect was larger in prefectures with higher per capita income. This contrasts with the findings of previous studies using international data, which showed that the multiplier effect was higher in countries with lower per-capita income and had the effect of shrinking international income disparities. I also found that the multiplier effect negatively correlates with productivity in most prefectures. This means that high-productivity sectors had smaller multiplier effects and did not spread much to other sectors in the region. In addition, high-productiveity sectors create fewer jobs than other sectors, while sectors that have a greater impact on job creation in other sectors have a smaller multiplier effect and are thus not successfully amplified through the production process.
Since the above research analyzes the multiplier effects from the consumption side, my studies last year also analyzed the multiplier effects on job creation through the production process of goods and services on which the high-income group prefer to spend For example, the higher income group has seen an exponential increase in education spending, but the multiplier effect in this sector is small, and the increase in consumption by the higher income group does not sufficiently spread to income and job creation for workers in other sectors in the prefecture. Therefore, we should not only strengthen industries that specialize or excel in a region but also pay attention to spillover from there.
As for the multiplier effect of employment from the consumption side mentioned above, I found that the multiplier effect is larger in areas where workers are concentrated. People seem to move to areas with a large multiplier effect, to areas with high-paying jobs, but they may not be able to move for a variety of reasons, such as family situations or lack of skills. Therefore, before the COVID-19 pandemic, I became interested in teleworking as a way of working that would allow workers to enjoy the benefits of regions with higher multiplier effects without having to relocate. Originally, I analyzed whether just changing the way of work changes productivity in the same job, and if so, what are the factors behind such changes. As with other academic journals, there was a time lag between when a paper was accepted by an academic journal and first published online and when it was published in print. I remember that the time the paper was published in print coincided exactly with the COVID-19 pandemic, and researchers from around the world contacted me.
This study shows that while teleworking had a positive effect on productivity, productivity decreased as more time was spent on telework. Right now, it can be said that people are influenced a lot by where they live, such as when employing hybrid work styles between working at home and in the office. In addition, teleworking has the greatest impact on people with long commutes (i.e., those who live in suburban areas). Another of my studies shows that it was in urban areas that jobs with the high feasibility of teleworking were offered. The industrial structure and the competitiveness of labor markets differ depending on the regions where people live and these affect people’s “work”.
One factor that influences the movement of people across regions and industries is skills. Last year, I analyzed whether the rise in basic skills, cross-functional skills, and knowledge required by firms lowers the post-turnover wages of people who leave those firms. While recruitment in Japan is based on a person’s potential rather than on specific skills and knowledge, if I estimate the data from the 2000s, depending on the type of skills and knowledge in Japan, people change jobs due to rising required levels, resulting in lower wages in subsequent jobs, and conversely, some skills and knowledge increased wages when moving to firms with rising required levels, with the former and latter types differing in their types. In addition, cross-functional skills promoted mobility as the theory suggests that skills could be used in different places (prefectures) instead of in other sectors. On the other hand, basic skills and knowledge havedid not promotedencourage mobility. That is, as employers' skill requirements increase and workers are forced to change jobs, wages fall because workers stay in the same place, as the theory goes. While the reskilling of workers is a hot topic, this analysis suggests that it is not only new technologies that are important, but also knowledge.
There is much to be learned from the study of competition economics, to consider the degree of competition in labor markets, and from the study of international economics, since cross-border work, such as telework, is also a trade in labor services. Although the methods of analysis are different, the issues addressed in labor economics are also related to human resource management theory and management science. The Graduate School of Commerce is fortunate to have an environment where it is easy to discuss these with experts. I would like to further develop my research by taking advantage of this environment.