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Back to Work: Japan

Improving the Re-employment Prospects of Displaced Workers

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Job displacement (involuntary job loss due to firm closure or downsizing) affects many workers over the course of their working lives. Displaced workers may face long periods of unemployment and, even when they find new jobs, tend to be paid less and have fewer benefits than in the jobs they held prior to displacement. Helping displaced workers get back into good jobs quickly should be a key goal of labour market policy. This report is the second in a series of reports looking at how this challenge is being tackled in a number of OECD countries. It shows that Japanese employers and the government go to considerable lengths to avoid the displacement of regular workers while also providing considerable income and re-employment support to many of the workers whose jobs cannot be preserved. Challenges for labour market programmes include expanding labour market mobility between regular jobs, improving co-ordination between private and public re-employment assistance for displaced workers, and avoiding that job displacement pushes older workers to the margins of the labour market.

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Helping Japanese displaced workers back into jobs

This chapter examines the active labour market programmes that are available to help displaced workers, once they are unemployed, to find new jobs and to retrain, when that is appropriate. Japan relies primarily on general job-search assistance and retraining programmes to assist this group, but also operates several targeted programmes for displaced workers that are tailored to their specific difficulties and strengths. The types of services offered by the Hello Work offices and polytechnic schools appear to be well suited in most respects to assist displaced workers to get back into jobs as quickly as possible, although often not into jobs that are as good as those they lost. The government has also shown that it can react very swiftly and flexibly when large numbers of workers are displaced, for example, when there is a mass dismissal or a natural disaster that greatly disrupts a regional labour market, or when job losses surge in a recession. The growing roles of prefectural governments and private placement agencies in assisting displaced workers is a welcome development, but there appears to be scope to better co-ordinate the different services offered to displaced workers.

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