The Effects of Supply Chain Disruptions Caused by the Great East Japan Earthquake on Workers

         
Author Name KONDO Ayako (University of Tokyo)
Creation Date/NO. June 2017 17-E-089
Research Project Transformation of the Japanese Labor Market : Toward a labor market for all
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Abstract

The Great East Japan Earthquake affected not only local workers employed by establishments that were directly damaged, but also those of their trading partners through supply chain disruptions. I estimate the effect of such indirect shocks to workers on their job separation, inter-industry mobility, geographical relocation, and employment status in the following years. I find that such shocks increased job separation in the study period. This increased job separation did not increase inter-industry mobility, but rather induced relocation to other prefectures. The effect on employment status was mixed. Although the self-reported indicator of being affected by the earthquake is significantly correlated with negative outcomes such as high unemployment, the proxy for the production decline at the prefecture-industry level is uncorrelated with employment status. This result implies that people who faced a negative employment shock may have attributed it to the exogenous event, which could cause substantial bias in the self-reported data on the effect of disasters.