Influence of Having Legal Person Status, Commercialization, and Professionalization of Third Sector Organizations on Their Employment: Based on the survey data on Japan’s third sector in 2014

Author Name NIHEI Norihiro (University of Tokyo)
Creation Date/NO. March 2018 18-J-011
Research Project Research on the Liberalist Reforms of the Public-Private Relationship and the Establishment of the Third Sector in Japan
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This paper is aimed at exploring factors affecting the quantity and quality of employment in third sector organizations based on the "Questionnaire Survey on the Management Status of Japan's Third Sector" implemented in 2014. In the analysis, we focus on the effects of the civil society reform on employment that began in the latter 1990s. It is believed that the reform has two dimensions. One dimension is to create new types of legal person status for non-profit organizations including a "specified non-profit juridical person" status which can be acquired without any arbitrary bureaucratic discretion. The other is to privatize public services and to develop quasi-market mechanisms promoting effective fundraising for third sector organizations. The civil society reform with the two dimensions has put pressure on each third sector organization to change its structure. The directions of change of third sector organizations are presumed to be acquisition of a legal person status, to be commercialized, and to be professionalized.

In this paper, we verify the effects of these three directions of change on employment in the third sector. The main findings are as follows: (1) The effects of having legal person status on employment are different according to the type of status. For example, an organization under a strict control of bureaucracy tends to provide a large number of decent jobs. On the contrary, the wage level of "the specified non-profit juridical person" is as low as an organization without any legal status. (2) As for commercialization, the increase in income from business is likely to create more jobs on one hand, however, widens the income gap among staff and lowers job security on the other hand. (3) Professionalization of staff through providing training courses also has both positive and negative impacts on the wage level.