- New releases
- Statistical data
- IMF research
- How to order
- Contact us
- Useful links
The Path to Higher Growth: Does Revamping Japan’s Dual Labor Market Matter?
Author/Editor: Chie Aoyagi, Giovanni Ganelli
Release Date: © October, 2013
ISBN : 978-1-48439-130-3
Stock #: WPIEA2013202
Stock Status: On back-order
Languages and formats available
This paper argues that Japan’s excessive labor market duality can reduce Total Factor Productivity (TFP) due to a negative impact on non-regular workers’ effort and on firms’ incentives to train them. On the basis of cross-country empirical evidence, the paper proposes some reform options. In particular, our analysis suggests that reducing the difference in employment protection between regular and non-regular workers would substantially reduce labor market duality in Japan. One reform consistent with these findings is the introduction of a Single Open Ended Contract for all newly hired workers. This reform could be complemented by a shift towards a model that combines labor market flexibility and security (“flexicurity”) and by policies aimed at encouraging wage growth.
More publications in this series: Working Papers