Disability employment and productivity

Japan’s disability employment policy is a levy system based on employment rates. The policy has been reinforced in recent years, in conjunction with Japan’s ratification of the United Nations Convention on the Rights of Persons with Disabilities. This paper takes a sample of individual companies continuously listed on the Tokyo Stock Exchange between 2003 and 2010 and coming under the jurisdiction of the Tokyo Labour Bureau to conduct empirical analysis on the relationship between statutory employment rates and corporate performance. The aim in doing so is to evaluate the effectiveness of Japan’s disability employment policy. The results of this analysis reveal that companies that met the statutory employment rate within the estimation period performed worse (in terms of profits) than those that did not. No impact could be found from the fact that persons with mental disabilities were added to employment rates during the period in question. Furthermore, it was also confirmed that achieving the statutory employment rate has no impact on a company’s productivity. Therefore, disability employment policies aimed at equalizing corporate burdens need to be reinforced.