The Japanese labor market during the COVID-19 pandemic

The Japanese labor market during the COVID-19 pandemic

Author/Editor:

Shinya Kotera; Jochen Schmittmann



Release date:

May 13, 2022

Electronic access:

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Disclaimer: IMF Working Papers describe ongoing research by the author(s) and are published to elicit comment and stimulate discussion. The views expressed in IMF working papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or the management of the IMF.


Summary:

This paper examines labor market dynamics in Japan during the COVID-19 pandemic using macro and micro data. The pandemic and related containment measures have had a major negative impact on employment, labor force participation, income and labor market mobility, although political support through furlough schemes partially dampened the rise in unemployment. Our results show that industry effects were a key factor in labor market outcomes for different groups of workers—women, younger age groups, irregular, self-employed, and low-income workers accounted for a disproportionate share of employment in the hardest-hit industries. We also find empirical evidence on the need to improve childcare and related support, training and professional development opportunities, the availability of teleworking, and the role of skill mismatch in reducing labor market mobility and reallocating resources.

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