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Japan's Safety Net Inequality: Labor Market Transformation and Social Insurance

Publish: April 21, 2020

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  • Tadashi Sakai

    Other : Professor, Faculty of Economics, Hosei University

    ÎçÒ¹¾ç³¡ alumni

    Tadashi Sakai

    Other : Professor, Faculty of Economics, Hosei University

    ÎçÒ¹¾ç³¡ alumni

Employment insurance provides a safety net for people when they lose their jobs, but do you know what percentage of unemployed people actually receive employment insurance (unemployment benefits)?

The answer is less than 30%. Conversely, more than 70% of unemployed people do not receive unemployment benefits. This is largely because those working in non-regular employment lose their jobs without meeting the eligibility requirements.

Not only is it difficult for people in non-regular employment to enjoy employment insurance, but they also tend to fall through the cracks of social insurance¡ªsuch as pensions and health insurance¡ªwhich are supposed to be part of "universal coverage," due to falling behind on premium payments.

If only those in stable forms of employment like regular employment can enjoy the benefits, is there any meaning to such a safety net? This was the awareness of the problem that led me to write this book.

That said, the "safety net inequality" between regular and non-regular employment has been widely pointed out before. In this book, I have gone a step further to consider measures to correct this inequality, along with the dilemmas they entail.

There are two directions for relief measures for those who have fallen through the safety net: expanding welfare such as public assistance, or expanding the scope of social insurance (employee insurance). The latter has a larger scope of impact. This is exactly what the government is currently pursuing, and I have no intention of denying that direction.

However, simply expanding the application of social insurance may not lead to improved benefits, and it may not be effective for those who are unemployed or work intermittently in the first place. This is particularly important when considering support for the "employment ice age" generation.

Relying on self-help efforts by families or corporate efforts to repair the frayed safety net also raises concerns about unfairness and side effects. As labor participation by women and the elderly progresses, careful design is required to adapt social insurance to these changes.

However, there were things I did not expect at the time of writing. Discussions on expanding the application of employee insurance, measures to secure employment until age 70, and the separation of childcare leave benefits have progressed rapidly in the past six months. That is why it might sound self-serving to say that it is important not to lose sight of the context of the discussion from the perspective of this book.

Tadashi Sakai

ÎçÒ¹¾ç³¡ Press

352 pages, 2,700 yen (excluding tax)

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