How Does Job Turnover Affect Subsequent Employment Instability? an Analysis of Inequality Among Job Leavers in Japan

This study explores the effects of job turnover on subsequent employment instabilities for individual careers in Japan. The Japanese labor market has been known for the long-term and inflexible employment. Since the late 1990s, however, the unemployment rate has risen beyond five percent, and also the rate of non-regular workers has also grown dramatically. Currently, Japan shares the common problem of unstable employment with other countries. Here, we study that how to leave the previous job affect the separation rate from workers’ subsequent job, with a special focus on the reasons for job turnover and the job mobility through unemployment.

The data we use is the 2015 Social Stratification and Mobility survey conducted in Japan, with detailed information on the retrospective job histories of individuals. Descriptive analyses show that those who have entered new jobs for involuntary reasons and after a period of unemployment are more likely to leave their new jobs than those who come from voluntary, job-to-job transitions. These results are also confirmed by discrete-time event history analysis with other control variables and unobserved individual-level heterogeneity. Men who leave jobs for involuntary reasons and with a period of unemployment are 1.3 times more likely to leave their subsequent job than those who leave for voluntary reasons and without unemployment; this corresponds to 1.4 times for women. More importantly, those who have once lost their jobs are more likely to (re-)experience displacement and (re-)enter into unemployment.

These results indicate that the opportunities to access stable employment are not equal among job leavers in Japan. In particular, it is difficult for those who leave their jobs for involuntary reasons and experience a subsequent period of unemployment. Job turnover causes unstable employment and cumulative disadvantage, especially for those who lose their jobs without immediately getting a new one.