Using the 2011–2016 Japan Household Panel Survey, this study examines the intergenerational transmission of married women’s employment in Japan. The study also analyzes two driving mechanisms. The findings suggest that the wife’s labor supply is positively associated with the mother-in-law’s former employment and the mother’s former employment. The preference mechanism reveals the effect of the wife’s employment on her husband’s satisfaction differs between men raised by a working mother and those with an unemployed mother in the past. The endowment mechanism suggests that married man with working wife cooperates to do domestic tasks regardless of his mother’s former employment.

This paper tests the effect of living arrangement on the probability of mothers' employment status in Japan using micro-data from a household survey. The analysis was conducted for grandmothers by focusing on distinguishing between grandmother and in-law. The father being the eldest son and the mother being the eldest daughter are used as instruments in bivariate probit models. The findings show that co-residing or proximate-residing grandmother (-in-law) increases the probability of mothers being in employment. That being said, Japanese mothers still need to get help from grandmothers to work. Other important findings indicate that mothers whose husbands are the eldest son tend to live with grandmother-in-law. This confirms that the Japanese norm still stands in modern Japan.

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