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The Increase in Part-timers and its Effects on the Wage Phillips Curve in Japan

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  • Yasutaka Ogawa

    (Keio University, Economics)

Abstract

In this paper, I quantify the effects of the increase in part-timers on the flattening wage Phillips curve in Japan. Specifically, I formulate the New Keynesian DSGE model which explicitly incorporates two different types of labour forces, which are fulltime labour and part-time labour, and their unemployment considering the structural change of the increase in part-timers. I employ estimation with Japan’s data using Bayesian techniques and obtain plausible results for structural and policy parameters. Then I do a counterfactual simulation without the structural change and compare it with baseline estimation. I find that roughly 30% of the wage Phillips curve flattening in Japan has been ascribed to the increase in part-timers.

Suggested Citation

  • Yasutaka Ogawa, 2024. "The Increase in Part-timers and its Effects on the Wage Phillips Curve in Japan," Keio-IES Discussion Paper Series 2024-028, Institute for Economics Studies, Keio University.
    • Handle: RePEc:keo:dpaper:2024-028
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    More about this item

    Keywords

    wage Phillips curve; wage growth; unemployment; DSGE models; structural change;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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