Japan's Post-Graduate Labor Market, 1960-1990, A Historical Analysis

The three decades from 1960 to 1990 saw significant changes occur in the Japanese labor market, particularly the segment comprised of new school graduates. Several writers have examined the effects on this market that were brought about by shortages of new graduate labor.1 This deficit began to manifest itself after the mid-1960s, continued in severity right through the 1970s despite the two oil crises, and lasted until about 1990, by which time the financial bubble of the late 1980s had burst. However, their work seems to have focused upon all new school graduates (i.e., junior and senior high school, junior and technical college, and university graduates). Indeed, this article shows that, when a close examination is made of the cohort specifically comprised of university graduates, it is doubtful that there was a genuine shortage of new workers until quite recently. In fact, it was the general demand for better-educated labor market entrants in the 1960s that spawned the dramatic increases in the numbers of graduates seen in the 1970s and 1980s.2 Furthermore, due mainly to economic crises in the 1970s and sheer volume in the 1980s, the employment situation for university graduates should have remained largely a buyer's market until the second half of the 1980s; but for several reasons, which will be explored herein, employers in Japan complained of a shortage of graduates throughout 1960-90.