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Regional employment during recessions and recoveries in Japan: A data-driven approach

Author

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  • Adachi, Yusuke
  • Ogawa, Hikaru
  • Tsubuku, Masafumi

Abstract

This study investigates the impact of economic shocks on regional employment in Japan using causal forest algorithms and compares the data-driven findings with estimates derived from standard ordinary least squares (OLS) regression. Our results reveal no significant difference in the magnitude of impact between small and large regions. Instead, regional differences in impact stem from variations in pre-crisis employment growth and the concentration of local employment. Specifically, regions with a high proportion of manufacturing jobs demonstrate resilience to recession-related job losses but recover slowly, while regions with pre-crisis employment growth exceeding 5% suffer steep declines during recessions but exhibit strong recoveries.

Suggested Citation

  • Adachi, Yusuke & Ogawa, Hikaru & Tsubuku, Masafumi, 2025. "Regional employment during recessions and recoveries in Japan: A data-driven approach," Journal of Asian Economics, Elsevier, vol. 98(C).
    • Handle: RePEc:eee:asieco:v:98:y:2025:i:c:s1049007825000417
    DOI: 10.1016/j.asieco.2025.101917
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    More about this item

    Keywords

    Economic shocks; Employment; Region; Industry and causal forests;
    All these keywords.

    JEL classification:

    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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