JOB CENTERS: ARE FINDERS KEEPERS? A NOTE FROM JAPAN

I. INTRODUCTION AND REVIEW Economic restructuring means workers are displaced from jobs. Likewise, recession makes workers redundant. To soften the blow of job loss, policy makers often advocate active labor market programs, which may involve job training or employment subsidies. (1) It is also common for governments to operate job centers, which try to match the jobless with potential work. Do job centers help unemployed people to find and keep jobs? (2) In recent years, unemployment has been a serious problem in Japan. Both prolonged economic sluggishness and global competitive pressures combined to aggravate joblessness. (3) Between 1993 and 2002, Japan's official unemployment rate more than doubled (from 2.5% to 5.4%). Japan's fabled system of "lifetime employment" came under considerable pressure, making older men particularly vulnerable to job loss. With recurring bouts of recession, younger people and manufacturing workers experienced more joblessness. Indeed, between 1994 and 2003, manufacturing employment dropped by more than one-fifth. The Japanese government operates a nationwide network of nearly 600 Public Employment Security Offices, operated under the name "Hello Work." These offices do not retrain workers; rather, they try to link people with jobs, providing information to job seekers about available work. (4 )Hello Work was once used mostly by blue-collar workers, elderly workers, and persons in outlying regions. But lately, the clientele has changed. Displaced managers, specialists, and technicians have made increasing use of Hello Work, as have younger people. And in big cities, Hello Work services have been in greater demand. Raisanen (2005) has reported on aspects of Japan's Public Employment Service. But to date, there has not been analysis whether Hello Work clients have been able to find and keep jobs. Citing increased turnover and labor market mismatch as growing problems, in 2001, Japan's Ministry of Health, Labour and Welfare (MHLW) commissioned a special survey of Public Employment Security Offices. Specifically, the survey examined whether Hello Work clients were finding work and keeping it. Respondents were tracked from November 2001 through January 2003, a period of relatively high (and rising) unemployment (5.4% in 2002, up from 5.0% in 2001 and 4.7% in 2000). This note uses the MHLW survey results to report on the job finding success of Hello Work clients. The aggregated nature of the survey data precludes a detailed, microlevel panel study. Nevertheless, even macrolevel survey data can disclose notable patterns. The job centers have distinct subclienteles, with success in finding and keeping jobs varying systematically across those subgroups. Moreover, job center clients were not particularly successful in finding jobs that fit their qualifications. So perhaps it is not surprising that clients tended to be dissatisfied. The Japanese government's concern with labor market mismatch appears to be justified. II. HELLO WORK JOB SEEKERS: PROFILE In the "General Survey on the Job Seeker," the MHLW conducted a two-part survey of 20,000 job seekers (see Ministry of Health, Labour and Welfare, 2004, pp. 80-89, 382, for details and statistics). These persons had come to Hello Work centers in November 2001 looking for work. They were surveyed in June 2002 about their job finding progress and then again in January 2003. Although disaggregated, individual details are not available, the macrolevel data are revealing. Table 1 (top panel) reports why these job seekers were looking for work. There is roughly an even split between those who lost jobs because they were terminated, 40.4%, and dissatisfied workers who quit jobs, 40.0%. Another 8.4% of the sample still had jobs but were looking to make a change. There are differences between the job losers and (would-be) quitters. TABLE 1 Job Seekers: Who and Why? …