Supply‐side effect of non‐standard work options on elderly people employment in Japan

Abstract

Purpose

How to get people working longer and retiring later is a new research topic for contemporary social policy. Flexible work options could be one possibility, but are special shorter‐working‐hours‐for‐elderly workplaces really important in order to increase employment among the 65+ age group? The purpose of this paper is to argue, in the case of Japan, that increased availability of non‐standard work formats would not improve labour force participation among the elderly when it is driven by corporate objectives to reduce labour costs. On the contrary, supply‐driven increase in flexible work formats sends a signal of unfavourable labour market conditions and causes the elderly to stay out of labour.

Design/methodology/approach

The paper utilizes the Labour Force Survey, a nationally representative data set showing labour force participation and employment formats across all age groups.

Findings

It is true that non‐standard work formats are being progressively more used among elderly workers. However labour force participation rate has increased only in cases where the increase in flexible work formats was demand driven, meaning only to the point where both standard and non‐standard work options were equally available to the whole population. When economic conditions force companies to offer more non‐standard work options, increase in supply side takes place. This sends a signal of unfavourable labour market conditions to the elderly population, who are more elastic to labour market changes and by using a pension can easily withdraw from the workforce.

Research limitations/implications

This analysis suggests that policy objectives to create flexible‐elderly work formats in order to increase the employment rate and reduce costs for the retirement system will not bring expected the results.

Practical implications

Although policy objective is to increase the employment rate among the elderly, focusing only on elderly will provide moderate results. Elderly population would come along, but only with the working age population. The first point of reform should be placed on the overall labour market, by diminishing major differences between standard and non‐standard work formats. One way could be the act of applying social security and company benefits to non‐standard work formats. Or opposite to that, the act of diminishing social security and company benefits to standard work formats.

Originality/value

This paper contributes to the literature by broadening understanding of elderly population behaviour in the labour market. With the increasing number of elderly people, retirement systems are looking for methods to postpone full‐retirement. Through analysis, the paper seeks to understand if and when flexible employment formats among the elderly are demand or supply driven.

Citation

Bachmann, J. (2009), "Supply‐side effect of non‐standard work options on elderly people employment in Japan", Equal Opportunities International, Vol. 28 No. 8, pp. 660-670. https://doi.org/10.1108/02610150911001698