Osaka University’s Research Center on Ethical, Legal and Social Issues (ELSI) today released a paper on diversity, ELSI Note No. 36 “Illuminating Gender Disparities through HR Data: An Initiative towards Equalizing the Gender Pay Gap at Mercari, Inc.” The paper is a collaborative work co-authored (in random order) by Fumiko Kudo, Ritsu Kitagawa, Takehiko Hayashi, Momoe Makino, and Atsuo Kishimoto.
Click for the full text (available only in Japanese): https://doi.org/10.18910/93498
ELSI NOTE is a series of papers published by the Osaka University ELSI Center that introduces domestic ELSI research and the latest trends in ELSI practices.
Note: ELSI is an acronym standing for “ethical, legal, and social issues.”
Summary of New ELSI Note “Illuminating Gender Disparities through HR Data: An Initiative towards Equalizing the Gender Pay Gap at Mercari, Inc.”
Fumiko Kudo (Osaka University)
To contextualize the gender pay gap across Japan, in 2021, for every 100 yen that a male worker earned, a female worker earned 75.2 yen. In an effort to eliminate this disparity, in 2022 the government of Japan amended The Act on Promotion of Women’s Participation and Advancement in the Workplace, making it mandatory for companies employing 301 or more employees to disclose their gender pay gap.
Mercari, Inc. (hereafter “Mercari”) chose to report on figures beyond the disclosure range required by laws and ordinances and analyzed data on the disparity among employees of the same job type and grade. As a result, the company uncovered that there was a 7% unexplained pay gap between their male and female employees. Moreover, immediately after looking at the results of their data analysis, Mercari took action to correct the pay gap by making adjustments to compensation levels to shrink the unexplained gender pay gap from 7% to 2.5%.
Mercari’s efforts were reported as a pioneering example in Japan and are gaining attention in society. At the same time, people are using social media to express their interest in and inquire about concrete methods and prerequisites for analyzing HR data.
In response, with the goal of putting together and disclosing related information as a case study, on November 13, 2023, we invited Mercari employees in charge of data analysis for their company as well as experts in such things as economics and data science to a workshop. This ELSI Note is a compilation of the results generated in the workshop.
Comment
Comments from the authors
- Momoe Makino (Deputy Director, Development Studies Center, Institute of Developing Economies)
- Since July 2022, it has been mandatory for companies with 301 or more employees to disclose the average wage (as a percentage) of female employees compared to that of their male colleagues. Mercari has gone beyond a simple comparison of averages to show the gender pay gap by comparing employees of the same grade, job type, age, and number of years at the company. The content of this paper will answer the questions that researchers interested in the topic have about how the actual estimate formulas used in these calculations are structured.
- Ritsu Kitagawa (Waseda University Graduate School of Economics)
- The factors contributing to gender inequality within a company are multifaceted, and it is crucial to diligently examine and address these issues based on a thorough analysis of HR data. This latest ELSI Note introduces an extremely progressive initiative implemented by Mercari and highlights one of the paths to analyzing the gender gap. I hope this ELSI Note will contribute to eliminating the gender gap present in our country.
- Takehiko Hayashi (Chief Senior Researcher for the Social Systems Division, National Institute for Environmental Studies of Japan)
- I feel that one point worth mentioning about this case is the use of information contained in a salary table (such as grade) as explanatory values of the salary model. In this case, it was, in a sense, a foregone conclusion that regression using a salary model would be correct, and the causes for the presence of an unexplained gap would be limited. Therefore, my overall impression was that Mercari performed additional qualitative and quantitative analysis internally to narrow down the reasons for the gap.
- Atsuo Kishimoto (Director, Research Center on Ethical, Legal, and Social Issues, Osaka University)
- The topics that we dealt with in this paper are only a portion of the various issues related to gender. There exist both unexplained and explained wage gaps. The reasons for these involve social and cultural factors that have accumulated over the years as a complex and tangled history formed. I think that analyzing and addressing the gender wage gap is a great first step toward tackling these existing issues.
- Fumiko Kudo (Project Researcher, Research Center on Ethical, Legal, and Social Issues, Osaka University)
- On the day of the workshop, a team composed of experts and Mercari members were told two things: “You don’t have to suppress your intellectual curiosity, but please strike a tone that will expand these burgeoning and progressive initiatives,” and “You may be asked pointed and detailed questions, but no need to sugarcoat your answers—please answer openly and honestly.” The discussion drew out people’s intentions and I think that the people who took part were great. I thank them for their cooperation.
Comment from Mercari member
- Aiko Cho (Mercari, Inc.)
- For Mercari, the 2023 gender wage gap correction was our first attempt to tackle this issue and required numerous rounds of trial and error. We would like to release as much information as possible on our analysis methods and approach and refine our initiatives while receiving feedback from people working in various fields. In addition, because there are limits to how much one company can do to eliminate the gender wage gap in our society at large, we would like to increase the number of partners who work with us on these efforts. For us, having the opportunity to hold this workshop was more than we could have asked for.
Note: For any inquiries regarding this research, please use the contact form on R4D’s website.