Labour Market Policy for Economic Growth

TSURU Kotaro (Faculty Fellow, RIETI / Professor, Keio University)

This study investigates the effect of a negative demand shock on the composition of the type of workers at firms, focusing on the change in the share of temporary agency in all workers. To clearly identify the causal link between the demand a firm faces and the composition of its workforce in terms of the type of workers and rule out any reverse causation, we use the 2007-2009 global financial crisis as a natural experiment, with the drop in demand experienced by exporting firms in Japan serving as an exogenous demand shock. We find that firms with a higher export ratio, a higher share of temporary agency workers, and a larger increase in the share of temporary agency worker ratio prior to the crisis decreased the share of temporary agency workers more than other firms in response to the demand shock. We also find that firms with a higher liquid asset ratio and higher volatility in their sales decreased the share of temporary agency workers less than other firms during the crisis. These results suggest that temporary agency workers serve as a buffer against demand shocks.

OWAN Hideo (Faculty Fellow, RIETI / Professor, the University of Tokyo)

Although female participation in the labour force and management is still lower than in any other developed country, the Japanese government has taken or is expected to take necessary steps to achieve its goal of female advancement. Three obstacles that are complementary to each other—tradition of working long hours, late promotion, and unequal gender division of household labour—will be discussed in the presentation with some evidence and implications from our studies of our personnel data repository project. Additionally, I argue that managers of Japanese companies need to expand the scope of gender neutral jobs in order to give women more opportunities to develop cross-functional skills and network by reducing overwork jobs.

SEKIZAWA Yoichi (Senior Fellow, RIETI)

Research in psychology and neuroscience has shown that negative emotions such as depression and anxiety lead to pessimistic risk estimates, while positive emotions such as happiness lead to optimistic risk estimates. We examined whether such trend is observed in the relationship between emotions and the consumer confidence index (CCI). We also examined the relationship between other psychological traits and the CCI. By constructing a multiple regression using the cross sectional data of 6,405 people, we found that higher levels of depressive symptoms are associated with lower levels of the CCI, whereas higher levels of optimism, life satisfaction, and general trust are associated with higher levels of the CCI. We also found that negative emotions are associated with lower levels of the CCI while positive emotions are associated with higher levels of the CCI. Through analyzing the panel data at three time points with a one-month interval each on 469 people, the result of abovementioned study was replicated except for depressive symptoms. We found that changes in the depressive symptoms do not directly lead to changes in the CCI, however, it was suggested that these may occur indirectly through the changes in the levels of life satisfaction, optimism, positive emotions, and negative emotions.