TY - JOUR
T1 - TFP growth slowdown and the Japanese labor market in the 1990s
AU - Esteban-Pretel, Julen
AU - Nakajima, Ryo
AU - Tanaka, Ryuichi
N1 - Funding Information:
The authors wish to thank Toni Braun, Junichi Fujimoto, Fumio Hayashi, Hidehiko Ichimura, Daiji Kawaguchi, Keisuke Otsu, Yasuyuki Sawada, Katsuya Takii and the seminar participants at RIETI and GRIPS for helpful comments and discussions. We are also grateful to Nao Sudou for his help in constructing part of the data used in this paper, and to Sachiko Kuroda for sharing her data on worker flows. The authors would also like to thank two anonymous referees for their comments and suggestions. This project was partially financed by the Grant-in-Aid for Young Researchers of the Japanese Ministry of Education. All remaining errors are our own.
PY - 2010/3
Y1 - 2010/3
N2 - Unemployment in Japan nearly tripled during the 1990s. Underlying this upsurge lie an increase in the probability of workers to lose their jobs and a decrease in the probability that the unemployed find jobs. This paper analyzes the sources responsible for these labor market changes in Japan in the decade of the 1990s. We build, calibrate, and simulate a neo-classical growth model with search frictions in the labor market. Using actual TFP data, the model is able to reproduce the path of unemployment and the job flows, as well as that of output. We find it to be the decrease in productivity, coupled with the reduction in hours worked, which curtails the profits of firms, inducing a drop in employment and an increase in unemployment.
AB - Unemployment in Japan nearly tripled during the 1990s. Underlying this upsurge lie an increase in the probability of workers to lose their jobs and a decrease in the probability that the unemployed find jobs. This paper analyzes the sources responsible for these labor market changes in Japan in the decade of the 1990s. We build, calibrate, and simulate a neo-classical growth model with search frictions in the labor market. Using actual TFP data, the model is able to reproduce the path of unemployment and the job flows, as well as that of output. We find it to be the decrease in productivity, coupled with the reduction in hours worked, which curtails the profits of firms, inducing a drop in employment and an increase in unemployment.
KW - Growth model
KW - Japan
KW - Lost Decade
KW - Search and matching
KW - TFP
KW - Unemployment
UR - http://www.scopus.com/inward/record.url?scp=77349094749&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=77349094749&partnerID=8YFLogxK
U2 - 10.1016/j.jjie.2009.11.002
DO - 10.1016/j.jjie.2009.11.002
M3 - Article
AN - SCOPUS:77349094749
SN - 0889-1583
VL - 24
SP - 50
EP - 68
JO - Journal of the Japanese and International Economies
JF - Journal of the Japanese and International Economies
IS - 1
ER -
