Economic Analysis Series No.203THE ECONOMIC ANALYSIS

Improving Access to Daycare/Nursery Schools: A Matching Theory Approach

By Yuichiro KAMADA and Fuhito KOJIMA

This paper aims to improve access to daycare/nursery school services in Japan. To cope with teacher-child ratio and other constraints found in this and other applications in practice, we propose and analyze a new and general model of “matching with constraints.” Central to our approach is a normative concept of fairness, and the applicant-optimal fair matching, a fair matching that is simultaneously most preferred by all applicants among all fair matchings. Our main theoretical finding provides a necessary and sufficient condition on constraints that guarantees the existence of an applicant-optimal fair matching.

Building on our theoretical findings, we study possible improvement of daycare allocation. More specifically, we study the performance of the applicant-optimal fair matching under daycare constraints using administrative data from Japanese municipalities. Our analysis of the data shows that, compared to the current practice, the number of unmatched applicants decreases and more applicants are placed to their more preferred options. Those findings suggest that the applicant-optimal fair matching mechanism may help improve daycare allocation in Japan.

JEL Classification Codes: C70, D47, D61, D63
Keywords: matching with constraints, fairness, daycare allocation

Research on the Effects of Tojisha-Kenkyu on the Workplace

By Shin-ichiro KUMAGAYA, Kotoko KITA and Satsuki AYAYA

In order to consider the conditions for a workplace that is inclusive of people with disabilities, this study first reviewed the current status and challenges of employment of people with disabilities in Japan and the U.S., and then suggested the need for “implementation of universalist accommodation policies for people with and without disabilities in the workplace, which can lead to organizational benefits, based on mutual understanding and trust that spans public and private life, and public support for it.” Through a case study and survey of previous research, we extracted the concepts of “high reliability and just culture,” “psychological safety,” “humble leadership,” and “knowledge sharing” as concepts describing the conditions that universalist accommodation policies should meet. We focused on tojisha-kenkyu as a candidate for a program that was consistent with these concepts. In addition, we developed a Japanese version of tools to measure the degree to which the culture expressed by these concepts was implemented in organizations. As a feasibility study, we developed and provided a course for companies to introduce tojisha-kenkyu. Comments of the participants revealed that they obtained a deep understanding of tojisha-kenkyu, and found that the implementation of tojisha-kenkyu in the workplace could be expected to have effects consistent with the above concepts, such as “environmental improvement and organizational change,” “problem solving,” and “relationship building.” On the other hand, it was also suggested that there existed several barriers to implementing tojisha-kenkyu in the workplace, such as “difficulty in securing psychological safety before implementation,” “difficulty in securing time and emotional space,” “difficulty in raising motivation for implementation,” “issue of protecting confidential information and personal information,” and “difficulty in facilitation.” The results of a study of three cases in which tojisha-kenkyu was implemented showed similar effects and barriers. Based on these findings, we could expect the effects of implementing tojisha-kenkyu in the workplace, and at the same time, identify its challenges. In order to overcome the challenges, it was suggested that it was necessary to verify the effects through intervention studies in the future.

JEL Classification Codes: D63, I38, J24, J28, J71, L53, M14, O15
Keywords: employment of people with disabilities, high reliability organization, psychological safety, humble leadership, knowledge sharing, tojisha-kenkyu

Bridging the Gap between Institutions: Elevation from Special to General Institutions

By Akihiko MATSUI and Satoshi KAWASHIMA

The Convention on the Rights of Persons with Disabilities calls for the establishment of a general institution for everyone, covering both people with and without disability, instead of a general institution covering only people without disability. This paper examines this issue by using the two opposing concepts of “relevant” and “irrelevant”. Just as making class and gender irrelevant has eliminated discrimination based on them, the prohibition of discrimination against people with disability requires that disability be regarded as non-essential. Not only de jure discrimination, but also de facto discrimination must be resolved. This paper also discusses affirmative action and examines the role of special institutions to incorporate people with disability into the general institution. As a concrete example, we examine the remote work system at the University of Tokyo and trace the process of elevation of this institution, which was introduced as a special institution for people with disability, into a general institution. It is concluded that through this elevation, the quality of society as a whole will also improve.

JEL Classification Codes: J7, K38, Z18
Keywords: General and special institutions, Relevant and irrelevant, Remote work system

Clinical Decision Making Under Uncertainty: What Is A Good Medical Practice?

By Masako II and Chiaki HARA

The purpose of this paper is to formulate the choice of a treatment or policy based on medical tests as a decision making under uncertainty in order to suggest a better decision in such a problem. While we consider mammography (for breast cancer) and PCR tests (for COVID-19) in this paper, they are quite different in that there is not enough evidence so far that allows us to deduce a single reliable probability of infection of COVID-19 in the population. As such, we analyze the situation as the decision making by an ambiguity-averse agent who cannot count on a single probability distribution over the state space. While several rules have been proposed and characterized in the literature for an ambiguity-averse agent to update probabilistic assessments based on medical tests and other types of additional information, we take up, in this paper, a rule that satisfies dynamic consistency and consequentialism for the purpose of proposing a rational decision. We show, under some plausible values of sensitivity and specificity of the PCR test, that the dynamically consistent rule requires the agent to reassess the highest ex-ante probability (prior to the test) of infection that is deemed relevant at the level of six times higher than when a naive, dynamically consistent rule is used.

JEL Classification Codes: D81, I12, I18
Keywords: Decision making, false positive, ambiguity

Habitual Regional Differences of Medical Treatment in Japan

By Hiroshi NOMURA and Nobuko HORI

There are regional differences in per capita medical expenses in Japan. The purpose of this paper is to perform panel data analysis using micro data on the factors that cause this regional difference. As a result of the analysis, it was found that three factors, the demand side factors, the supply side factors, and other factors, have the same degree of influence. Other factors include regionally unique differences that are difficult to measure quantitatively. The analysis showed that these regionally unique differences were highly correlated with supply side factors. The analysis also suggests that the abundant individual data available in recent years alleviates the asymmetry of information that exists between practitioners and recipients in the healthcare services market.

JEL Classification Codes: I11, I12, D8
Keywords: medical expenses, information asymmetry, two-part model

Synthesis of the Theory of Matching with Constraints and the Application to the Japanese Medical Matching Market

By Yuichiro KAMADA and Fuhito KOJIMA

We have developed a theory of matching with constraints over several articles. The objective of this paper is two-fold. First, we synthesize the results contained in those papers. Second, we make a policy-proposal regarding Japanese medical residency matching.

Matching with constraints refers to the problem of matching in which some exogenous constraints are imposed. A leading example is the Japanese medical residency matching, where for each of the 47 prefectures, the government has set an upper bound on the number of doctors that can be matched. Our theory designs a matching mechanism that efficiently matches doctors with hospitals while respecting such a constraint. Motivated by this example, we develop a general theory of matching with constraints.

JEL Classification Codes: C70, D47, D61, D63
Keywords: matching with constraints, medical residency matching, efficiency, market design

Higher School Admission Procedure Reforms in Prewar Japan

By Chiaki MORIGUCHI

When the government has limited resources for higher education, what is an effective and equitable way to allocate school seats to students? In this study, we focus on a series of admission procedure reforms for national higher education in Japan during the first three decades of the twentieth century. First, we examine how the admission mechanisms were designed and implemented from a perspective of matching theory in economics. Next, using contemporaneous as well as subsequently available data, we investigate whether the points of contention in the repeated reforms were empirically valid and to what extent these policy designs were based on empirical evidence.

JEL Classification Codes: D02, I23, I28, N35, O15
Keywords: School Choice, Meritocracy, Matching Algorithm, Educational Disparity, Social Mobility

Rare Diseases and Medical Institutions in Meiji Japan: Policies of Imperial Army and Navy on Beriberi

By Akihiko MATSUI and Megumi MURAKAMI

This study defines the medical institution as “the way of playing a game (=custom) to determine commonly understood knowledge” among medical professionals and examines the influence of the medical institution on medical research.

Specifically, after the Army and Navy suffered from beriberi abroad during the Meiji era, this study analyzes how the director of the Medical Bureau, who had decided on the policy to combat beriberi, chose his successor. At that time, there were two major theories on how to prevent beriberi: one was that white rice could be eaten (white rice theory), and the other was that barley should be given instead of white rice to prevent beriberi (barley theory). As a result, the policy and the results of the measures against beriberi differed greatly between the Army and the Navy. The purpose of this analysis is to examine the impact of the medical institution on the aggregation of knowledge about rare diseases by historically and theoretically analyzing the personnel changes of medical directors in the Army and Navy.

In the above analysis, game theory is used. Specifically, we construct a game called the succession game. There are a predecessor and two candidates for succession, and the predecessor chooses a successor from the candidates. In the Army and Navy of Meiji-era Japan, the director of the medical bureau could essentially appoint the successor, and the succession game was played. Under such a game, an informative equilibrium was played in the Navy, in which a good succession candidate would come up with measures based on his own information. It was shown that in order for information to be used correctly (and to overturn established theories), subordinates must be superior to their superiors. On the other hand, in the Army, a conforming equilibrium was played. In the conforming equilibrium, the information held by the candidate is lost. In the Sino-Japanese War as well as in the Russo-Japanese War, the Army's inability to actively provide barley can be seen as a result of the conforming equilibrium. However, information aggregation occurs in neither equilibrium: only one person's information is used, resulting in the waste of valuable information. In this way, we have shown that the medical institution may prevent the aggregation of knowledge about rare diseases.

JEL Classification Codes: D80, I18, N30
Keywords: Policies of the Japanese Army and Navy on beriberi, Succession game, institutions and rare diseases

Redistribution and Inclusive Growth in a Super-aged Society

By Sawako SHIRAHASE

This study examined the redistribution system in Japan, focusing on social and private transfers, to determine how it might leverage inclusiveness and further inclusive growth to improve redistribution through social security systems for the next generation. Japan’s current social system primarily benefits older people, since about 80% of the benefits are provided as either medical care or pensions. The current welfare policies in Japan depend on families playing a relatively large role in providing basic livelihood. This study examined the redistribution effects, taking into account differences in age, cohort, and gender, using data from the Comprehensive Survey of People’s Living Conditions conducted by the Japan Ministry of Health, Labour and Welfare. Gini coefficients and relative poverty rates were calculated based on the equivalent disposable and initial incomes.

This study had three major findings. First, the redistribution effects were largely explained by age differences, not by household type or cohort. Although people born in the 1970s (now in their 40s-50s) are disadvantaged in the labor market, the extent of redistribution targeted toward them is not particularly different from other generations. Similarly, the redistribution effect by household type was not significantly different. Second, as the population ages, the gender ratio differs increasingly, and this gap in gender ratio is closely related to an increase in the poverty rate. In particular, single-mother families in young and middle-aged groups and female elderly living alone showed very high poverty rates. The implicit assumption behind Japan’s social security system is that women will raise children with their spouses, with whom they will live into their old age. Third, more aggressive redistribution to young and middle-aged households experiencing economic hardship, is needed. Private transfers do not substantially alleviate poverty. Based on our findings, we propose a more comprehensive redistribution system in which the concept of inclusiveness is embedded to relieve economic hardships across generations.

JEL Classification Codes: D22, D25, D81
Keywords: aging population, household transformation, redistribution, gender inequality

Self-Help, Mutual Help, and Public Help: A Thought on the Role of Markets

By Takashi IIDA

The terms self-help (Jijo), mutual help (kyojo or gojo), and public help (kojo) appear in situations where the burden of social risk is an issue, such as in social security and disaster prevention. This paper looks back at how these terms have been interpreted in Japanese social security, and then examines the “subsidiarity principle” that is used in conjunction with them. Through this analysis, I argue that there is little need to interpret self-help, mutual help, and public help in terms of the subsidiarity principle. Next, I discuss the bearers of mutual help using the results of several surveys. I will show that markets, which have not been directly addressed in the government policy on social security in Japan, can become the bearers of mutual help. In such a case, it is important to design a system that does not integrate markets into a hierarchical structure of self-help, mutual help, and public help, but rather allows for redundancy.

JEL Classification Codes: I30, K30, P46
Keywords: subsidiary principle, legal system, markets, mutual help, redundancy

Inclusion in the Labor Market: Focusing on the Employment of Persons with Disabilities in Japan

By Ryoji HOSHIKA and Reiko NISHIDA

Japan’s employment policy for persons with disabilities (PWDs) has placed strong emphasis on the entry of PWDs in the labor market. In 2013, Japan enacted the Amendment of the Act for the Promotion of Employment of Persons with Disabilities, which introduced the principle of prohibiting discrimination against PWDs and the obligation on employers to provide reasonable accommodation. While the Amendment could have been a radical paradigm shift in disability employment policies in Japan, even after the enactment of the Amendment, the separation of duties or at the workplace between PWDs and employees without disabilities has continued or worsened. Against this background, the present paper focuses on “inclusion” of PWDs in the labor market. Specifically, we use the concept of “social inclusion” as our analytical framework. Inclusion/exclusion in the labor market can be broken down into integration/segregation and participation/alienation. In this framework, the highest degree of labor market inclusion in the market is characterized by both integration and participation. While in the field of education, the issue of integration vs. segregation matters and potentially leads to conflict, in the Japanese labor market, segregation at the workplace to match PWDs’ abilities and aptitudes to work is not regarded as a matter. This paper suggests that this situation was caused by quotas for PWDs and related legal provisions and vocational education in special needs schools. Moreover, integration and participation is made difficult by the dilemma that spatial and institutional proximity with non-PWDs may decrease the degree of achievement that PWDs may obtain from work. In this paper, we examine this assumption and conclude that existing practices based on “segregation and participation” are just a makeshift solution that presupposes the current structure of the workplace. Further, we discuss the possibility that current “work style reforms” and “reasonable accommodations” can make changes to existing labor market practices.

JEL Classification Codes: J70, J71, J78, M14
Keywords: Employment of Persons with Disabilities, Inclusion in the Labor Market