Mismatched labor market: Case from Japan

Ippei Shibata in a working paper argues that the labor market has been sharply mismatched in terms of occupation and employment type. The unemployment rate in Japan is low but it is steadily increasing in last three decades. The 10-year average unemployment rate rose from 2.5 percent in the 1980s, to 3 percent in the 1990s, and to 4.7 percent in the 2000s. 

Shibata asks is the labor market mismatch a big deal in Japan. yes, it has been a problem. “It is an important issue and policy measures and structural reforms that can successfully reduce labor market mismatch in japan will play an important role in the future,” reads the paper making conclusion.