Policy Responses to Youth Employment Issues OHTA Souichi
4. Policies to enhance the functions of the employment market
sought by companies through just half a year of overseas experience; we should not pin all our expectations on this idea. In addition, it cannot be ignored that whether students can spend the gap term efficiently depends strongly on the monetary capacity of households, etc., which should be avoided.
Fourthly, educational systems responding quickly to globalization are sought after now. On June 14, 2011, Keidanren, the Japan Business Federation, announced a number of “Proposals toward Cultivation of Global Human Resources.” As such initiatives indicate, the business world is crying out for human resources who can play active roles on the global stage. In fact, many companies are increasing the employment of foreigners (including foreign students) for that exact reason. University education must be improved such that Japanese students can adapt to these trends as well. Since the ability to take advantage of foreign languages is particularly important, efforts to offer professional education in English currently being advanced by several universities should be further promoted.
In sum, increasing the frequency of contact between companies and universities to promote mutual understanding is likely to be a potential policy for resolving the mismatch.
2011-2012 JIIA Research Project: Policies Needed to Ensure Japan’s International Competitiveness
side has various types of information on students, including their academic work. Indeed, the universities often provide the main living quarters of the students. Thus, we can expect better matching performance in the new graduate phase if both sides are able to collaborate smoothly.
Note that Professor Yuji Genda of the University of Tokyo made a very interesting proposal:
proactively commission employment assistance that can be provided by universities to employment agents with sufficient expertise and track records in career switching/reemployment support.
Specifically, a university enters a consignment contract with employment agencies stating that “the university pays a fee and, in return, wants employment support services including fee-based employment placement for students specified by the university,” and students have interviews with counselors dispatched from such agencies to decide on relevant places of employment. From the viewpoint of the improvement of matching job seekers and job providers, such mechanisms appear highly worthy of consideration.
The following arguments can be given for the second point, “increasing transparency of employment-related information.” First, the most essential problem in terms of youth employment issues is the fact that jobs cannot be easily found. At the same time, one of the reasons why unemployment among young people remains high seems to be that young workers often leave jobs that they had such trouble finding. It is true that finding employment during a business depression may often result in disappointing employment, which the employee eventually wants to leave, but it cannot be denied that job seeking under conditions of insufficient information is an additional cause of problems as well.
According to a large-scale survey conducted in 2007 by the Japan Institute for Labour Policy and Training (“Survey on the Reasons Young People Leave Their Jobs and How They Could Be Made to Stay in Their Jobs”), many young workers tend to want to switch careers in cases where new recruits joined companies without obtaining sufficient information, cases where they judge the initial training provided by the companies to be insufficient, cases where they have no one to go to for advice, and cases where the job requires a great deal of sacrifice from the employee, such as frequently having to work during holidays (and overtime).
As a consequence, any efforts to narrow down the gap between the job descriptions and workplace atmosphere imagined by young people before being hired and the actual reality they face after being hired are surely going to act in the direction of decreasing the mismatch due to lack of information
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available before joining companies. Specific examples include clearly explaining the type of job and job description before employment and conducting detailed company visits as well as introductory probation work periods. In addition, implementing mentor systems and follow-up meetings with superiors, so that young people can talk to someone about their problems, etc. will also serve as important measures preventing labor turnover. Frequent overtime work and work during holidays easily lead to the desire to switch careers because young people must significantly sacrifice their private lives and thus tend to accumulate frustration. In this sense, appropriate labor hours and holiday management can also help in preventing young people from leaving their jobs.
In addition, the disclosure of employment information of educational institutes should be promoted as well. University websites, etc., often contain employment rates, but this value is simply the ratio of employed people to job seekers, and it is not clear how high the percentages of graduates with particular career options are out of the total in many cases. Nonetheless, such information is essential in order to grasp the employment conditions of each university from the outside. Each university is obliged to report the number of graduates and breakdown data including “number of employed graduates,” “those who found temporary jobs,” and “those who proceeded to higher education” to the Ministry of Education, Culture, Sports, Science and Technology, and the aggregated results are published in the “School Basic Survey.” It is necessary to make it obligatory to publish this data on websites, etc. as well, so that the employment information of universities becomes easily available to the public.
As a matter of fact, this has several advantages. Firstly, it provides incentives for each university to assert itself properly in terms of job-hunting support. If it is prohibited to exclude students who gave up on being employed as they could not get an employment guarantee from job providers, in order to raise the nominal employment rate, universities have no choice but to put efforts into securing places of employment for students in order to survive. Secondly, it provides extremely important information about the quality of each university to high school graduates and their parents who intend to “purchase”
the educational services of the universities. Some universities may face problems in securing enrollment as a result of disclosing information, but at least it is possible to alleviate the tragedy where graduating students having difficulties in job placement must face the reality of their universities for the first time at their graduation.
2011-2012 JIIA Research Project: Policies Needed to Ensure Japan’s International Competitiveness
Lastly, I would like to mention the idea of securing places of employment via wide-area matching.
Young people in rural areas have few excellent job opportunities compared to young people in urban areas. For this reason, moving from rural to urban areas to find employment outside one’s prefecture plays a role in limiting unemployment among young people (Ohta, 2010). As a means of supporting youth employment, recruiting activities by companies across regions and wide area job-seeking activities by job seekers will be supported in terms of information and cost. Moreover, guiding young people who move across regions through policies such that they get used to the new work environment is considered to have an effect on suppressing increases in the rate of unemployment caused by U-turns as it encourages them to stay in their current positions. At the same time, it would be necessary to examine how we can support young people who were unable to find jobs in their home towns and had no other choice than making their way outside their prefectures.
In this aspect, the government should formulate and implement youth employment measures that cover wider areas, for example by urging companies to announce job offers to new graduates in wider areas, which in turn may help alleviate employment issues. Moreover, assisting young people such that they can seek jobs across wider areas can also be a measure to ease the inter-regional mismatch in employment. It will be necessary to combine meticulous job-hunting support at the regional level and the enhancement of services to match job seekers with job offers in wide areas.
References
Hideo Akabayashi, Hiroko Araki, Souichi Ohta, Michio Naoi (2012) “Analysis of National High School Survey: Actual Employment Records,” unfinished manuscript.
Hiroko Araki, Hiroki Yasuda (2011) “Economic Analysis on Requirements of Informal Regular Job Offers to Universities,” KEIO/KYOTO Global COE Discussion Paper Series, DP2011 – 015.
Souichi Ohta (2010) “Economics of Youth Employment,” Nikkei Publishing Inc.
Souichi Ohta (2012) “The Falling Employment Rate of New University Graduates in Japan: On the Effect of the Rising University Enrollment Rate,” “The Japanese Journal of Labour Studies,” No.619, 29-44.
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Yuji Genda (2001) “A Nagging Sense of Job Insecurity: The New Reality Facing Japanese Youth,”
Chuokoron-Shinsha, Inc.
Naoki Mitani (2001b) “Employment Policies for Older Workers and Labor Demand in Japan,” Edited by Takenori Inoki and Fumio Ohtake “An Economic Analysis of Employment Policies in Japan,”
Chapter 11, University of Tokyo Press
Cahuc, P. and A.Zylberberg (2006) The Natural Survival of Work, MIT Press.
OECD (2004) Employment Outlook, OECD, OECD Publishing, Paris.
Spence, M. (1973) “Job Market Signaling,” The Quarterly Journal of Economics, vol. 87, issue 3, p.355—374.
Notes:
1 Numerical values based on the “School Basic Survey.” The number of job-finders does not include “people who found temporary jobs.”
2 Many positive studies indicate that graduating from a university on the high end of the curve has a favorable impact on the average success in finding jobs. A recent analysis supporting this includes Araki and Yasuda (2011).
3 This is the signaling theory by Spence (1973). The original formulation states that there is an inverse correlation between the height of productivity not observed by companies and the cost of acquiring educational status. Similar logic can be used assuming that there is a positive correlation between the cost of training after joining companies and the cost of acquiring educational status.
4 Ohta (2012) analyzed time-series data of the employment rate of university graduates and obtained the conclusion that increased numbers of people pursuing university education actually caused a drop in the employment rate of university graduates.
5 Akabayashi, Araki, Ohta, and Naoi (2012) used data from high schools to clarify that the possibility of internship involving credit recognition improves the employment rate.