Active labour market policies in Japan: a shift away from the company-centred model?

Abstract

Japan has been characterized as a company-centred society in which ‘welfare through work’ is the main source of welfare provision. Although the Employment Insurance scheme contains some elements of active labour market policies, these are based on a lifelong employment system that prevents rather than promotes labour mobility among companies.

The traditional model has recently been challenged. Young people can no longer easily find stable jobs because companies have reduced the ratio of regular workers. The government has implemented various schemes outside the Employment Insurance scheme to support youth, single mothers and the elderly who are located on the periphery of the model.

Nevertheless, the Japanese model of work-welfare nexus still maintains a company-centred nature, though coverage of its privileges has been shrinking. Even in recent recessions, employers have sought to retain their regular workers. The Employment Adjustment Subsidies offered under the Employment Insurance scheme support employers’ efforts to retain employees.

Although the traditional model is at a crossroads, it is unrealistic to predict its sudden demise. We should seek ways to redress disparities between insiders and outsiders of the model by enriching active labour market policies for youth, single mothers and the elderly, while simultaneously maintaining the merits of long-term employment.

Keywords:

• company-centred society
• active labour market policies
• Employment Insurance
• Employment Adjustment Subsidies

Notes

1. This section is based on Kamimura (2011).

2. Therefore, public assistance itself is not examined here.

3. As a result of the government's budget screening, the cram school programme for youth (wakamono-jiritu-jyuku) was abolished in 2010.

4. Nihon Keizai Shimbun (Evening Edition), 17 April 2012, p. 1.

5. The amount of benefit is calculated by 90 (in principle; in the case that the remaining number of days of benefit of the basic allowance is less than 90 days, the number equivalent to the remaining number of days of benefit (if that number is less than 45, then 45) × the daily amount of the basic allowance (for which there is an upper limit) × 40%.

6. ‘Regarding the state of progress with the job card system (occupational-skill formation system), 6 March 2012’, MHLW, p. 1, http://www5.cao.go.jp/jobcard/siryou/20120306/siryou2.pdf [Accessed 4 April 2012].

7. MHLW, Overview of Public Vocational Training, http://www.mhlw.go.jp/bunya/nouryoku/kousyoku/ [Accessed 4 April 2012].

8. ‘On Support for Single Parent Families’ (15 October 2011), Equal Employment and Child and Family Bureau, Family Welfare Division, MHLW (2011, p. 18).

9. ‘On Support for Single Parent Families’ (15 October 2011), Equal Employment and Child and Family Bureau, Family Welfare Division, MHLW (2011, p. 14).

10. ‘On Support for Single Parent Families’ (15 October 2011), Equal Employment and Child and Family Bureau, Family Welfare Division, MHLW (2011, p. 22).

11. MHLW (2011), Health and Labour White Paper, p. 3.

12. In addition, the Employment Measures Law was revised in June 2007, stipulating that employers must give equal opportunities regardless of age to recruit and employ workers, and mandating prohibition of age limit.

13. The following figures for the actual situation are taken from MHLW (2011), ‘2011 Summary of Results of the “Employment Situation of Older Persons.” ’