Immigration Policy and Highly Skilled Workers: The Case of Japan

By Fuess, Scott M., Jr. | Contemporary Economic Policy, April 2003 | Go to article overview

Immigration Policy and Highly Skilled Workers: The Case of Japan


Fuess, Scott M., Jr., Contemporary Economic Policy


I. INTRODUCTION AND REVIEW

It seems to be a stylized fact that economic globalization is resulting in an increasingly integrated global labor market, especially for highly skilled specialists. Indeed, frequent accounts from Europe and North America warn of shortages of skilled workers, especially in areas related to information technology. Changes in immigration policies have been advocated, and some countries--for example, Germany and the United States--recently made it easier for highly qualified specialists to obtain work visas.

In a recent study, Bartram (2000) made the point that most immigration research tends to focus on "positive" cases, that is, countries that have experienced significant immigration inflows. Countries such as Australia, Canada, New Zealand, and the United States often are the subjects of immigration studies, because over time they have accepted large numbers of newcomers. Likewise, well-known cases of foreign "guest workers" in Germany or undocumented immigrants elsewhere in Europe have attracted scrutiny. But Bartram argues that to understand international flows of labor it is crucial to analyze "negative" cases, too. He wrote that "migration scholars can benefit from systematic investigation of instances where labor migration has not occurred in large volume" (p. 5).

Perhaps no country better exhibits a negative case of immigration than Japan. Emphasizing the homogeneity of its population and possessing a highly developed sense of its own uniqueness, Japan traditionally has been closed to foreigners. Its Immigration-Control and Refugee-Recognition Act (ICRRA) sharply restricts inflows of both unskilled laborers and refugees. Indeed, among industrialized countries Japan has the smallest proportion of foreign residents (OECD, 2001).

Given its strict approach to immigration, one might think that international labor mobility has not been an issue for Japan. As one of the world's richest and technologically advanced countries, Japan has long required a highly skilled labor force. Heretofore, the country has relied on education policy, internal migration, and long working hours to provide its labor supply (see Cornelius, 1994; Reubens, 1981). But can this approach continue?

When Japan's economy was surging in the 1980s, there were shortages of unskilled labor. Then it was argued in Japan, often with a sense of resignation, that the country must open its economy to foreign laborers (for example, Saito, 1990). Many Japanese, nevertheless, expressed misgivings about this view. Such misgivings prevailed, for Japan did not liberalize its immigration policy to admit more unskilled labor.

In contrast to the 1980s, during the protracted economic slump of the 1990s it became fashionable in Japan to fret that the country was falling behind, especially in information technology. This perceived skills gap led many to advocate opening the labor market to more foreign specialists. Indeed, in 2002 the Council on Economic and Fiscal Policy (CEFP), a panel chaired by Prime Minister Koizumi, reported that the country must "import intellectual talent to enhance Japan's international competitiveness" (Japan Times, 2002, p. 16).

Pressure to accept foreign labor is reinforced by Japan's unfavorable demographics. Its rate of population growth has declined steadily since 1973; thus the population is expected to shrink after 2010. With the aging of a relatively large cohort of older workers, the number of working-age (aged 15-64 years) persons is already shrinking. The work-eligible population reached its maximum in 1995, at 87.2 million. By 2000 it was projected to shrink more than 700,000; by 2005, it is expected to fall by another 5+ million, to 81.2 million.

Given Japan's demographics, many accounts have reported that it will be forced to import thousands of workers, especially technical experts (for example, Devan and Tewari, 2001; van den Berg, 2002). …

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