Job displacement (involuntary job loss due to firm closure or downsizing) affects
many workers over the course of their working lives. Displaced workers may face long
periods of unemployment and, even when they find new jobs, tend to be paid less and
have fewer benefits than in the jobs they held prior to displacement. Helping displaced
workers get back into good jobs quickly should be a key goal of labour market policy.
This report is the second in a series of reports looking at how this challenge is
being tackled in a number of OECD countries. It shows that Japanese employers and
the government go to considerable lengths to avoid the displacement of regular workers
while also providing considerable income and re-employment support to many of the
workers whose jobs cannot be preserved. Challenges for labour market programmes include
expanding labour market mobility between regular jobs, improving co-ordination between
private and public re-employment assistance for displaced workers, and avoiding that
job displacement pushes older workers to the margins of the labour market.