|Author Name||TSURU Kotaro (Senior Fellow, RIETI)
|Creation Date/NO.||April 2011 11-J-049|
|Research Project||Reform of Labor Market Institutions
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The essence of non-regular employment problems lies not in temporary staff services but in fixed-term employment. Thus, reforming the fixed-term employment system is necessary in order to address the instability of employment, inequality in the treatment of employees, and a decline in labor quality due to the recent expansion in fixed-term employment. To be more precise, inequality in the treatment of employees should be reduced by introducing some forms of compensation for employment instability, e.g., severance pay at the end of the contract, and treating fixed-term employees in the manner that takes account of the length of their service period. It is also necessary to create various types of employment contracts which would bridge the gap between permanent employment and temporary contracts, thereby providing intermediary steps from an unstable temporary job to a stable permanent job. Moreover, from the viewpoint of the need to promote an income redistribution policy, the earned income tax credit (EITC) for low-income earners should be introduced.