The Relationship between Establishment-level Age Composition and Employment Changes (in Japanese)

From the results of previous job creation and destruction studies, it found that establishment-level employment changes are closely-linked to idiosyncratic factors of establishment, e.g., age composition of workers, age of firms or establishments, working conditions, etc. In this paper, I examine the relationship between ratio of middle-aged and older workers and establishment-level employment changes in Japan in the 1990s, using microdata from the Employment Trend Survey of 1990, 1995 and 2000. First, a multinomial logistic regression model indicates that establishments of the higher ratio of middle-aged and older workers have a high degree of probability for becoming job destruction establishments. Second, a switching regression model shows that a higher ratio of middle-aged and older workers has significant negative effects for establishment-level employment changes in job destruction sector. In job creation sector, however, it has no significant negative effects for employment changes. A switching equation also shows that establishments of manufacturing, wholesale and retail trade, finance, insurance and real estate industry are likely to sort over job destruction sector. Empirical findings of this paper suggest that rising of ratio of middle-aged and older workers is the cause of curbing new hires and suppressing job creation through increasing personnel cost.