Japan’s dual labor market and its macroeconomic characteristics

Hirokazu Mizobata ()
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Hirokazu Mizobata: Kansai University

Empirical Economics, 2024, vol. 67, issue 1, No 8, 165-196

Abstract: Abstract This study examines the characteristics of Japan’s dual labor market, which consists of standard and non-standard employment. I conduct labor stock and flow analyses using Japanese Labour Force Survey data from 2002 to 2022. The stock analysis suggests that, in the long run, non-standard employment improves labor market conditions, such as employment and unemployment rates. Changes in the composition of standard and non-standard employment reduce the average hours per worker in the long run but play a limited role over the business cycles. The flow analysis reveals that inflows and outflows involving non-standard employment have relatively significant effects on changes in employment and unemployment rates. This feature of non-standard employment is more pronounced for females and young individuals. The flow analysis also shows that within-employment reallocation, that is, transitions between standard and non-standard employment, primarily determines the changes in the share of non-standard employment. The sluggish movement between these two types of contracts leads to a persistently high level of non-standard employment in Japan.

Keywords: Non-standard employment; Labor market stocks; Labor market flows; Working hours; Variance decomposition (search for similar items in EconPapers)
JEL-codes: E24 E32 J21 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s00181-024-02555-6

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