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Job creation and destruction in Japan: Evidence from division-level employment data

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  • Liu, Yang

Abstract

This study employs division-level data for Japanese firms to measure the simultaneous processes of job creation and destruction that take place within a firm. This provides a more nuanced picture of employment dynamics than the standard approach which rests on a single measure of net job creation at firm level. Data cover the period 1995–2014 at annual frequency for about 30,000 firms each year. Empirical results indicate that wages and job productivity significantly affect job creation and destruction. Specifically, higher wages decrease job creation and increase job destruction, whereas higher productivity increases job creation and reduces job destruction. Moreover, although employment under Japan’s lifetime employment system (seishain workers) helps to mitigate job destruction, it also hinders job creation, with the latter effect dominating to diminish employment growth overall.

Suggested Citation

  • Liu, Yang, 2018. "Job creation and destruction in Japan: Evidence from division-level employment data," Journal of Asian Economics, Elsevier, vol. 58(C), pages 59-71.
    • Handle: RePEc:eee:asieco:v:58:y:2018:i:c:p:59-71
    DOI: 10.1016/j.asieco.2018.07.001
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    References listed on IDEAS

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    1. Moser, Christoph & Urban, Dieter & di Mauro, Beatrice Weder, 2010. "International competitiveness, job creation and job destruction--An establishment-level study of German job flows," Journal of International Economics, Elsevier, vol. 80(2), pages 302-317, March.
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    Cited by:

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    3. Guilmi, Corrado Di & Fujiwara, Yoshi, 2022. "Dual labor market, financial fragility, and deflation in an agent-based model of the Japanese macroeconomy," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 346-371.
    4. Bin Ni & Hayato Kato & Yang Liu, 2023. "Does it matter where you invest? The impact of foreign direct investments on domestic job creation and destruction," The World Economy, Wiley Blackwell, vol. 46(1), pages 135-152, January.
    5. Richard Kofi Asravor & Frank Gyimah Sackey, 2023. "Impact of Technology on Macro-Level Employment and the Workforce: What are the Implications for Job Creation and Job Destruction in Ghana?," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 168(1), pages 207-225, August.

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    More about this item

    Keywords

    Job creation; Job destruction; Wages; Job productivity; Hiring cost;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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