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Effects of increased elderly employment on other workers’ employment and elderly’s earnings in Japan

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  • Ayako Kondo

Abstract

This paper examines the effect of increased elderly employment in Japan, caused by the legal obligation of continued employment enacted in 2006, on employment of other workers and elderly’s own earnings. I find no evidence for substitution between young full-time workers and elderly workers, while there might be a modest crowd out of middle-aged female part-time workers. I also find a substantial decline in earnings of baby boomers, who reached age 60 after 2006, in their early sixties. These results suggest that firms primarily cut wages of elderly workers, and some firms reduced the number of female part-time workers. JEL code: J26 Copyright Kondo. 2016

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  • Ayako Kondo, 2016. "Effects of increased elderly employment on other workers’ employment and elderly’s earnings in Japan," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-23, December.
    • Handle: RePEc:spr:izalpo:v:5:y:2016:i:1:p:1-23:10.1186/s40173-016-0063-z
    DOI: 10.1186/s40173-016-0063-z
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    1. Takashi Oshio & Satoshi Shimizutani & Akiko Sato Oishi, 2010. "Does Social Security Induce Withdrawal of the Old from the Labor Force and Create Jobs for the Young? The Case of Japan," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 217-241, National Bureau of Economic Research, Inc.
    2. Jonathan Gruber & David A. Wise, 2010. "Social Security Programs and Retirement around the World: The Relationship to Youth Employment," NBER Books, National Bureau of Economic Research, Inc, number grub08-1.
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    4. Zhang, Chuanchuan, 2012. "The relationship between elderly employment and youth employment: evidence from China," MPRA Paper 37221, University Library of Munich, Germany.
    5. Junya Hamaaki & Masahiro Hori & Saeko Maeda & Keiko Murata, 2012. "Changes in the Japanese Employment System in the Two Lost Decades," ILR Review, Cornell University, ILR School, vol. 65(4), pages 810-846, October.
    6. Daiji Kawaguchi & Fumio Ohtake, 2007. "Testing the Morale Theory of Nominal Wage Rigidity," ILR Review, Cornell University, ILR School, vol. 61(1), pages 59-74, October.
    7. Rene Boheim & Thomas Nice, 2019. "The effect of early retirement schemes on youth employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-70, October.
    8. Jonathan Gruber & Kevin Milligan & David A. Wise, 2010. "Introduction and Summary," NBER Chapters, in: Social Security Programs and Retirement around the World: The Relationship to Youth Employment, pages 1-45, National Bureau of Economic Research, Inc.
    9. Ayako Kondo & Hitoshi Shigeoka, 2013. "The Effectiveness of Government Intervention to Promote Elderly Employment: Evidence from Elderly Employment Stabilization Law," Working Papers e061, Tokyo Center for Economic Research.
    10. Martins, Pedro S. & Novo, Alvaro A. & Portugal, Pedro, 2009. "Increasing the Legal Retirement Age: The Impact on Wages, Worker Flows and Firm Performance," IZA Discussion Papers 4187, Institute of Labor Economics (IZA).
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    Cited by:

    1. Inoue, Toshikatsu, 2022. "The effect of aging on the age–wage profile in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 66(C).
    2. Teruyama, Hiroshi & Goto, Yasuo & Lechevalier, Sebastien, 2018. "Firm-level labor demand for and macroeconomic increases in non-regular workers in Japan," Japan and the World Economy, Elsevier, vol. 48(C), pages 90-105.
    3. Bertoni, Marco & Brunello, Giorgio, 2017. "Does Delayed Retirement Affect Youth Employment? Evidence from Italian Local Labour Markets," IZA Discussion Papers 10733, Institute of Labor Economics (IZA).
    4. Rene Boheim & Thomas Nice, 2019. "The effect of early retirement schemes on youth employment," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-70, October.
    5. Yokoyama, Izumi & Kodama, Naomi & Higuchi, Yoshio, 2019. "Inequality through wage response to the business cycle–Evidence from the FFL decomposition method," Journal of the Japanese and International Economies, Elsevier, vol. 51(C), pages 87-98.
    6. Kawata, Yuji & Owan, Hideo, 2022. "Peer effects on job satisfaction from exposure to elderly workers," Journal of the Japanese and International Economies, Elsevier, vol. 63(C).
    7. KAWATA Yuji & OWAN Hideo, 2020. "Peer Effects on Job Satisfaction from Exposure to Elderly Workers," Discussion papers 20084, Research Institute of Economy, Trade and Industry (RIETI).
    8. Ignacio APELLA, 2024. "The fallacy of the lump of labour theory: Evidence for Latin America," International Labour Review, International Labour Organization, vol. 163(1), pages 49-71, March.
    9. Nishimura, Yoshinori, 2016. "Did Government Intervention on Firm’s Employment Policies Have an Effect on the Employment of Elderly Workers?," MPRA Paper 73444, University Library of Munich, Germany.

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    More about this item

    Keywords

    Elderly employment; Youth employment;

    JEL classification:

    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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