The fading 1990s in Japan: Driving forces behind the unemployment upsurge

Agnese, Pablo and Sala, Hector (2008): The fading 1990s in Japan: Driving forces behind the unemployment upsurge. Published in: International Review of Economics and Finance , Vol. 18, No. 3 (June 2009): pp. 428-439.

Abstract

This paper sheds new light on the causes of the unemployment upsurge in Japan during the “fading 1990s”, an unprecedented period of structural crisis. We estimate a labor market model and identify the main macroeconomic determinants of labor demand and labor supply decisions in last decades. We then conduct dynamic simulations and assess the relative contribution of these determinants to the evolution of unemployment from 1990 to 2002. Beyond the leading role exerted by the decline in productivity growth, we find the active and expansionary measures undertaken by the government had an overall negative effect on the labor market.

• Item Type: MPRA Paper
• Language: English
• Keywords: Japan; unemployment; productivity; macroeconomic policies; chain reaction theory
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E24 - Employment ; Unemployment ; Wages ; Intergenerational Income Distribution ; Aggregate Human Capital ; Aggregate Labor Productivity; J - Labor and Demographic Economics > J0 - General > J01 - Labor Economics: General; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E60 - General

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