Japan can do more to encourage smooth transition of laid-off workers back into jobs, says OECD | WPN World People News

Japan could help laid-off workers find a job more quickly by improving co-ordination between public employment services and companies, as well as ensuring that all workers benefit from adequate Employment Insurance (EI) benefits, according to a new OECD report.

Back to Work: Japan says that a significant fraction of Japanese workers are laid off each year and then face long periods of joblessness before finding work, often at much lower wages. While lower than in many other OECD countries, the rate of 1.4% of the labour force laid off each year has changed little since 2000.

Some workers are more at risk than others, especially older, less educated and non-regular employees, particularly those on temporary contracts, and employees of small firms. Between 2002 and 2013, less than half of all displaced workers found another job within one year. Women and older or less educated workers have the most difficulty finding another job and are more likely to earn less.

The report shows that prevention and early intervention policies, such as the Employment Adjustment Subsidy (EAS), are well developed in Japan and make an important contribution to lowering the number of laid-off workers and the costs that they bear. Even when redundancy is unavoidable, measures such as transferring workers to other companies are sometimes taken to lessen the impact, although these benefits do not apply to non-regular workers.

Women and younger workers in particular receive little or no severance and outplacement support from their employers, and also tend to qualify for shorter periods of EI benefit. The OECD recommends that policy makers assess whether there are gaps in the adequacy of public income support for some groups that need to be filled.

The report also underlines the need for greater information exchange between private outplacement agencies engaged by employers and the public assistance offered by Hello Work. One good example of early intervention at prefectural level was the early retirement plan announced by Sharp in 2012, involving good collaboration with affected workers that helped many find work quickly.

This thematic review was prepared to help workers who lose their jobs for economic reasons or as a result of structural change to move back into work, and is built on other recent research on topics such as youth unemployment, activation policy, skills and the labour market impact of the Great Recession. Including Japan, nine countries will participate in the review: Australia, Canada, Denmark, Finland, Korea, New Zealand, Sweden and the United States.

Source: Organization for Economic Co-operation and Development