The Effects of Job Entry Methods on Outcomes in Switching Jobs (Japanese)

Toshihiro Kodama, Yoshio Higuchi and Masahiro Abe

Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: From the 1990s onward, employment mismatching was a conspicuous problem in Japan and the development of an external labor market to enable the smooth allocation of the labor force became a pressing issue in order to promote structural reform and economic recovery. In that context, we examined job-switching trends, focusing particularly on the effects of job entry methods, which play an intermediary role in labor force allocation. In order to identify the effects of job entry methods, this paper analyzed the relationship between job entry methods and labor market outcomes for job switchers, based on a special aggregation of the Survey on Employment Trends published by the Ministry of Health, Labour and Welfare and its regression analysis. Labor market outcomes were measured by the length of time required to find a new job ("no-job duration") and the change in wages between the previous and current jobs. The results of the analysis showed that the role played by information intermediation of the job entry methods is an important one, since "friends and relatives" and "introduction by the former employer" were more effective in producing favorable labor market outcomes than "public employment security offices"; that there is potential for "public employment security offices" to achieve better labor market outcomes by strengthening their information intermediation function; and that although "private employment agencies" are effective in producing favorable labor market outcomes and are expected to develop further, they cannot meet the needs of those who have difficulty finding employment, nor is their effect significant in provincial areas, so other job entry methods will continue to be important.

Pages: 70 pages
Date: 2004-07
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