Fluctuations in Unemployment and Industry Labor Markets

Masahiro Abe, Souichi Ohta

Research output: Contribution to journalArticlepeer-review

8 Citations (Scopus)


Throughout the 1990s, and particularly in the mid- to late-1990s, the Japanese employment situation went from bad to worse. We investigate the causes of rising unemployment in Japan, using data on individual workers from the "Special Survey of the Labor Force" between 1988 and 1999. This research focuses on the effect of labor market segmentation by industry on labor flows. Our findings reveal that unemployment in the construction industry and, more recently, in the service industry has contributed greatly to the national unemployment rate. We also find that most successful job transfers occur within the same industry, even though workers may experience some periods of unemployment. Finally, our results show that labor market conditions in each industry affect the probability that a worker will fall into unemployment as well as the probability that an unemployed worker will find new employment. These findings suggest that the Japanese labor market is segmented by industry and this segmentation contributed to the worsening unemployment in Japan. J. Japan. Int. Econ., December 2001, 15(4), pp. 437-464. Department of Economics, Dokkyo University, 1-1 Gakuen-cho, Soka-shi, Saitama 340-0042, Japan; Graduate School of Economics, Nagoya University, Furo-cho, Chikusa-ku, Nagoya, 464-8601, Japan.

Original languageEnglish
Pages (from-to)437-464
Number of pages28
JournalJournal of The Japanese and International Economies
Issue number4
Publication statusPublished - 2001 Dec
Externally publishedYes


  • Japanese economy
  • Labor flow
  • Segmented labor market
  • Unemployment

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics
  • Political Science and International Relations


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