Labor Force Participation Rate

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Question 1a

Figure 1.1 Unemployment Rate in Japan.

Figure 1.2 Labor participation rate for total, male and female.

Figure 1.1 Shows unemployment rate is on the upward rising trend since year 1980 to year 2008. An increase in unemployment is seen from year 1980 to year 1986, then follow by a slight decrease in year 1987 to 1991 and continue to increase steadily from year 1992 to 2002 reaching a record of 5.4% high unemployment rate in year 2002. However, from year 2003 to 2008, a decrease in unemployment rate is observed.

Figure 1.2 shows the labor participation rate, total (% of total population ages 15+) had been decreasing since year 1980 to 2008. In year 1980 – 1983 there is an uprising trend, showing an increase in labor participation rate. Year 1984 to 1988, the labor participation rate, total decreases. Then it increases to an all time high at year 1991. After that, year 1992 onwards a drastic falls in the labor participation rate, total happens to year 2004. Year 2005 – 2008, has a relatively constant labor participation rate, total.

The relationship of unemployment and total, female and male labor force participation rate are examined.

The discourage worker effect is the major reason that causes the total labor forces to decline during the weak economy (Saito, 2000). The Japanese are at the stage of aging population and young persons pursuing higher level of educational attainment directly had cause the Japanese not to join the labor force after being retrenched. During year 1997 to 2000s, elderly person has mostly reached the retirement age, while this period most of the younger generation choose to go to college. Both old and young age feels discourage join the high unemployment rate, and therefore not to participate.

Figure 1.2 shows the labor participation rate, male (% of male population ages 15+) had been decreasing since year 1980 to 2008. In year 1980 to 1989 there is a sharp decrease in the labor participation rate,...
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