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Life-cycle search, match quality and Japan’s labor market

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  • Esteban-Pretel, Julen
  • Fujimoto, Junichi

Abstract

The Japanese labor market has been experiencing considerable transformations over the recent decades. We analyze the implications of some of these actual and potential transformations, whose impact may not be homogeneous across workers of different ages. We first develop a life-cycle search and matching model which incorporates random match quality as well as elements capturing important institutional features of the Japanese economy. Our model is consistent with the life-cycle properties of Japan’s labor market, namely that the job separation and unemployment rates are U-shaped, whereas the job finding rate declines with age. We then conduct three experiments that are relevant to Japan: a decline in productivity, a removal of the firing costs, and a decline in the population growth. In the first two experiments, we find substantial changes to these three rates, where young workers tend to be the most affected. We observe, however, a very small labor market impact in the third experiment.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 26 (2012)
Issue (Month): 3 ()
Pages: 326-350

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Handle: RePEc:eee:jjieco:v:26:y:2012:i:3:p:326-350

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Web page: http://www.elsevier.com/locate/inca/622903

Related research

Keywords: Search and matching; Life-cycle; Overlapping generation; Match quality; Japan; Productivity decline;

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References

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Cited by:
  1. Lin, Ching-Yang & Miyamoto, Hiroaki, 2014. "An estimated search and matching model of the Japanese labor market," Journal of the Japanese and International Economies, Elsevier, Elsevier, vol. 32(C), pages 86-104.

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