|Author Name||Timothy DESTEFANO (OECD) / HANEDA Sho (Nihon University) / KWON Hyeog Ug (Faculty Fellow, RIETI)|
|Creation Date/NO.||September 2019 19-E-067|
|Research Project||East Asian Industrial Productivity|
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The following paper examines the determinants of structural adjustment in Japan. Unlike many other developed economies, firms in Japan rely more on changes to employment composition than mass layoffs as a method of structural change. Examining the drivers of changes in employee composition in Japan is therefore of interest to policy makers and academics alike. This research uses a novel plant-level dataset, which contains considerable detail on the types of employees used by Japanese manufacturers between 2001 and 2014. The results find a number of countervailing factors that explain the use of certain employment types. Growth in the diffusion of robotics is linked to the use of fewer non-regular employees. This appears to be partially driven by the fact that these machines positively predict the dismissal of certain types of non-regular workers. Offshoring from Japan leads to the use of a higher proportion of non-regular to regular workers, potentially due to increased competition faced by plants from abroad. Plant productivity however leads to the use of more regular to non-regular workers. Finally, establishments which experienced job dismissals in the past are substituting away from regular to non-regular workers in the present.