Heterogeneous worker flows and Japan’s labour market

ABSTRACT

This study analyzes the roles of heterogeneous worker flows in Japan’s labour market. I divide workers into regular, non-regular, and self-employed and other workers and examine the effects of these different types of worker flows on Japan’s labour stocks. I find that the fluctuations in the job separation rate for non-regular workers and the participation margin are relatively important for the evolution of Japan’s unemployment rate. Further, the transitions between regular and non-regular jobs play a major role in the dynamics of Japan’s non-regular worker ratio.

KEYWORDS:

• Heterogeneous worker flows
• Japan’s labour market
• demographic changes
• labour transitions

JEL CLASSIFICATION:

• E24
• J10
• J21

Acknowledgments

This work was supported by JSPS KAKENHI grant number 20K13519. I would like to thank the anonymous referee for helpful comments and suggestions. I also thank Editage (www.editage.jp) for providing language editing support.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes

¹ This study defines non-regular workers based on the job title or the description in the workplace. The non-regular workers include part-time workers, temporary workers, dispatched workers, contract workers, entrusted workers, and others.

² The distinction based on the job title is more comprehensive because some part-time workers work hours close to those of full-time workers (see Osawa 2001).

³ Lin and Miyamoto (2012) and Esteban-Pretel, Tanaka, and Meng (2017) use the same method. The Ministry of Labour is the predecessor of the current Ministry of Health, Labour and Welfare.

⁴ Borowczyk-Martins and Lalé (2019) show that transitions between full-time and part-time employment account for around 70% of the variation in the part-time employment share.

⁵ This result echoes the results in Pizzinelli, Theodoridis, and Zanetti (2020), Fujita and Ramey (2012), and Zanetti (2019). These studies show that job separation is the key to understanding labour market fluctuations.

Additional information

Funding

This work was supported by the Japan Society for the Promotion of Science [20K13519].