Academic journal article Monthly Labor Review

Japanese Unemployment: BLS Updates Its Analysis

Academic journal article Monthly Labor Review

Japanese Unemployment: BLS Updates Its Analysis

Article excerpt

In a 1984 article in the Review, we presented an analysis of Japan's Labor force data and concluded that the official Japanese unemployment rates are only slightly understated in relation to U.S. concepts.(1) The data analyzed in the article were from the "Special Survey of the Labour Force Survey" (referred to as the special survey hereafter), conducted in Japan in March 1977 through 1980.

This report updates the article by analyzing data from the 1984 through 1986 special surveys which were conducted in February. Unlike the March surveys, the February surveys indicate that official Japanese unemployment rates are slightly overstated relative to U.S. concepts. In any event, the February results confirm the broad conclusion drawn from the earlier study: Japanese unemployment rates are virtually unchanged when U.S. concepts are applied.

Our article noted that it was difficult to draw firm conclusions from the March data because March is a very unusual month for the Japanese labor market. It is both the end of the fiscal year, when Japanese firms traditionally take on new workers to start April 1, and the end of the school year, when new graduates enter the labor market. Although February is also a month of higher than average unemployment for Japan, there is less seasonality associated with this month than with March, and the February results for 1984-86 provide new information about what may be expected in a more typical month.

The original BLS article was partially a response to a 1983 Review article by Koji Taira which also analyzed the March 1977-80 surveys.(2) In contrast to the BLS view of these surveys, Taira concluded that the Japanese jobless rate would be "nearly double the official unemployment rate" if U.S. concepts were used. Although both BLS and Taira found it necessary to make several adjustments to Japanese unemployment to bring it more in accord with U.S. concepts, BLS, by contrast, found Japanese unemployment to be only slightly understated.

A 1984 article by Sadonari Nagayama, former director of the Japanese Statistics Bureau, also reached conclusions different from Taira's.(3) Nagayama argued that Taira's adjustments were too large, particularly the adjustment in which he classifies as unemployed more than 500,000 students who graduated in March and would start work in April. Information from the February 1984-86 surveys throws further light on this issue.

The special surveys of February 1984-86 were not available to Taira or BLS when the earlier articles were written. After reviewing the surveys, BLS believes they support the contention that the Japanese unemployment rate is only slightly changed when U.S. concepts are applied. This report presents an analysis of the February surveys, including a breakdown of the results by sex. In addition, unemployment rates using an expanded concept of unemployment are calculated and compared.

Japan's special survey

To supplement its monthly labor force survey, the Japanese Statistics Bureau conducts special surveys once or twice each year to investigate, in more detail, the labor force status of the population and provide data needed for making employment policies. The themes of the special surveys change according to the social and economic circumstances and data needs at the time of each survey.

The underlying purpose of the special surveys from 1977 through 1980 was to investigate, in detail, the rise in the unemployment rate which began after the first "oil crisis." Later surveys had other emphases. For example, the March 1981 survey highlighted the situation of part-time workers and the 1983 survey presented a current labor force status versus usual status comparison. The differing underlying themes necessarily influenced the whole structure of the survey questionnaires. Modifications in questions and wording were made, not without a sacrifice to the continuity of the time series. …

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