The Effects of Training under the Employment Adjustment Subsidy during the COVID-19 Pandemic: Evidence from Japan

Yudai Higashi and Masaru Sasaki
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Yudai Higashi: Faculty of Economics, Kyoto Sangyo University and Research Institute for Economics & Business Administration, Kobe University, JAPAN
Masaru Sasaki: Graduate School of Economics, Osaka University, JAPAN and Institute of Labor Economics (IZA), GERMANY

No DP2026-11, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: In Japan, many establishments adversely affected by the COVID-19 pandemic received an Employment Adjustment Subsidy (EAS) to maintain employment. Beyond subsidizing temporary leave allowances, the EAS also includes a scheme that subsidizes employee training provided by establishments. Using establishment-level administrative data, this study examines the characteristics of establishments providing EAS-supported training to their employees and the relationships between such training and three outcomes—establishment closure, job separation, and business activity—during the pandemic. The results indicate that establishments with workforce compositions and industry affiliations linked with higher expected returns to human capital investment were more likely to provide EAS-supported training. Among EAS recipient establishments, those providing EAS-supported training in the early stages of the pandemic exhibited a lower probability of closure than those that did not; however, this pattern was not observed for establishments that stopped receiving EAS later. Some estimates indicate lower job separation rates among establishments providing EAS-supported training. We find little evidence suggesting that EAS-supported training improved subjective business activity levels. Overall, although some results suggest favorable relationships of EAS-supported training with establishment closure and job separation, the benefits of such training appear limited.

Keywords: Employment adjustment subsidy; Training; Establishment closure; Job separation; Business activity; COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: H25 J24 J63 L25 (search for similar items in EconPapers)
Pages: 75 pages
Date: 2026-03, Revised 2026-04
New Economics Papers: this item is included in nep-lma and nep-sea
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