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Significant regional variations by prefecture level exist for the family and the elderly in Japan. This suggests that the Japanese family, and aging society as well, must be studied carefully with close attention to the socio‐cultural characteristics specific to each region and community (Kumagai, 1997a, 1997b). Therefore, it is essential to move the unit of analysis down to the community level rather than the national or even prefecture (regional) level. Social practices and cultural characteristics specific to each region and community are difficult to measure and quantify. Upon careful examination of Japanese married women in the traditional extended family, the theoretical hypothesis was postulated: Whether in urban or rural regions, regardless of the place of residence, married women living with their mother‐in‐law are likely to seek work outside the home. A national random sample of 3,662 Japanese women was analyzed. In conducting Chi‐square significance tests, this hypothesis is proved to be valid. The most striking finding of this study is that working outside the home seems to be one of the effective alternatives adopted by married women in the traditional generational family household. When son’s wives are in the labor force, it is most likely to reduce intergenerational conflict, a negative aspect of co‐residence living arrangements. In other words, working outside the home helps to minimize intergenerational conflict with in‐laws ‐mothers‐in‐law, in particular). Thus, the qualitative analysis of the family can provide effective indicators for the in‐depth analysis of Japanese families. It is, therefore, necessary to propose welfare policies for the elderly in the same manner, rather than simply looking at national average statistics.