2014 Fiscal Year Research-status Report
財政政策が労働市場に与える影響についての理論、実証分析
| Project/Area Number |
25780195
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| Research Institution | International University of Japan |
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Principal Investigator |
LIN Ching 国際大学, 国際関係学研究科, 准教授 (70582287)
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| Project Period (FY) |
2013-04-01 – 2016-03-31
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| Keywords | 労働市場改革 / 一般均衡 / 労働生産性 |
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| Outline of Annual Research Achievements |
In this year I complete a research project, “Employment protection policy and macroeconomic outcomes”, which assess the long-run policy effects of employment legislation on the macroeconomic aggregates. This question is important because it relates to the labor reforms conducted in Japan recently: by easing the restriction of temporary employment to reduce labor cost, the reform attempts to induce the business sector to raise employment and investment, and thereby revive the stagnated economy.
One thing need to consider is that this reform may practically lead the use of temporary contract on the unskilled worker, leave the skilled worker under stringent protection. Thus this kind of partial reforms may generate unintended effects.
To assess this issue, I construct a model, built upon Hopenhayn and Rogerson (1993), considering worker’s decision on labor force participation, workers’ heterogeneity, and labor market search friction. I compare the effects two different types of partial reforms: reducing the protection on unskilled workers and skilled workers. The numerical simulation results indicate that to reduce the employment protection on the unskilled worker only brings about improvement on productivity, employment and workers’ welfare. A clear beneficial effect is reducing the income inequality. In comparison, the partial reform on the skilled workers leads to sizable effects on most of the macroeconomic aggregates.
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| Current Status of Research Progress |
Current Status of Research Progress
3: Progress in research has been slightly delayed.
Reason
As reported in the "Summary of Research Achievements", in this year I redirected the research focus from the short run effects of fiscal stimulation to the long rune effects of labor reforms. This new direction considers a broader perspective of policy effects: in addition to labor market performance, it also includes macroeconomic aggregates and welfare analysis. Most importantly, this research readily provides policy implication for current labor reform in Japan. However, this new research direction inevitably delays the planned progress original project. The delay will be catch up this year.
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| Strategy for Future Research Activity |
In this year I will complete the numerical analysis of the research project "Fiscal stimulus and labor market performance", and summarize it as research paper.
As for the project "Labor market protection and macroeconomic outcomes", the completed results will be presented in the university seminar and conferences. Based on the received comments, I will revise this paper and submit to academic journals.
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| Causes of Carryover |
In this fiscal year, I took sabbatical leave and had an opportunity to work in the Nagoya University as a visiting scholar. By taking advantage of the plentiful resources in Nagoya University, I did not spend as much budget as I planed.
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| Expenditure Plan for Carryover Budget |
A part of the funds will be used to upgrade computer hardware and software for the numerical analysis. In addition, now there is a significant part of the research relating to the details of legislations on employment protection, in particular the Japanese case. Therefore, some of the funds will be allocated for hiring research assistant to organize the data, as well as for the payments to translators.
Moreover, this funds will be also used for the cost of traveling for presenting the research results in conferences and university seminar.
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