Productivity and Mobility of Labor

Since the economic bubbles burst at the beginning of the 1990’s, the Japanese economy has stagnated for three decades. Many publications, including “Basic Policies for Economic and Fiscal Management and Structural Reform 2023,” argue that low mobility of labor to high productivity sectors hinders healthy growth of the economy. This paper is an empirical study of the relationship between sectoral productivity growth and labor inflows/outflows. It turns out that the growth rate of productivity is low in sectors where labor flows in.