Labor Force Participation Rate

Question 1a

Figure 1.1 Unemployment Rate in Japan.

Figure 1.2 Labor participation rate for total, male and female.

Figure 1.1 Shows unemployment rate is on the upward rising trend since year 1980 to year 2008. An increase in unemployment is seen from year 1980 to year 1986, then follow by a slight decrease in year 1987 to 1991 and continue to increase steadily from year 1992 to 2002 reaching a record of 5.4% high unemployment rate in year 2002. However, from year 2003 to 2008, a decrease in unemployment rate is observed.

Figure 1.2 shows the labor participation rate, total (% of total population ages 15+) had been decreasing since year 1980 to 2008. In year 1980 – 1983 there is an uprising trend, showing an increase in labor participation rate. Year 1984 to 1988, the labor participation rate, total decreases. Then it increases to an all time high at year 1991. After that, year 1992 onwards a drastic falls in the labor participation rate, total happens to year 2004. Year 2005 – 2008, has a relatively constant labor participation rate, total.

The relationship of unemployment and total, female and male labor force participation rate are examined.

The discourage worker effect is the major reason that causes the total labor forces to decline during the weak economy (Saito, 2000). The Japanese are at the stage of aging population and young persons pursuing higher level of educational attainment directly had cause the Japanese not to join the labor force after being retrenched. During year 1997 to 2000s, elderly person has mostly reached the retirement age, while this period most of the younger generation choose to go to college. Both old and young age feels discourage join the high unemployment rate, and therefore not to participate.

Figure 1.2 shows the labor participation rate, male (% of male population ages 15+) had been decreasing since year 1980 to 2008. In year 1980 to 1989 there is a sharp decrease in the labor participation rate, male. A small increase is seen on year 1990 to 1993. Next, an extreme decrease in labor participation rate, male happens from year 1994 to 2008.

In Japan, the male labors force participation rate decrease because the discourage worker effect dominates. The reason that male labors force choose to quit from the labor force during recession is that they feel themselves are not under the current economic situation, not favorable working hours or salary and also not suitable for own knowledge or skill (Kawata & Naganuma, 2010). Male labors felt them self very discourage from continuing to search for new jobs during the bad times. They have a negative perception about their jobs and choose to be homemakers. Thus, they choose to quit at this time, causing the male labor forces to decrease. Discourage worker effect dominates from year 1990s to 2002 during the economic downturn.

Figure 1.2 shows a big fluctuation is observed in the labor participation rate, female (% of female population ages 15+) from year 1980 – 2008. An uprising trend is seen from year 1980 to year 1992; a declining trend is exercised from year 1993- 2004. Year 2004 – 2008, the labor participation rate, female had shown a small increase yearly.

When unemployment is high, female labor participation rate is high. Due to job security and income for male is declining, causes females to work even after their marriage. Female feels that their husband’s income could no longer full fill the breadwinner’s role in the Japan society. Due to the economic downturn, most jobs concentrated in non-regular jobs, mostly part – time jobs. These part time jobs had attracted women to join the labor force because work is relatively more flexible; it allows women to balance work and home responsibilities (Osawa, 2004). Female now find that they need to work in order to ensure they are having adequate family income. This shows that, the added effect had dominated in the female labor force.