Examination of the Occupational Polarization Hypothesis

Analysis on the Japanese Labor Market in 21st Century Based on the Employment Structure Survey Data

Abstract

Over the last few decades, “job polarization hypothesis,” which implies a decline in the share of middle-pay jobs compared to jobs with higher or lower pay, has been dominant among economists and sociologists in the US and Europe. This paper examines the extent to which the polarization hypothesis applies to the Japanese labor market since the late 2000s, relying on the analytical perspective of international comparative studies focusing on the institutional complementarities of advanced capitalist countries, such as Welfare Regime and the Variety of Capitalism, by using the Employment Structure Survey（shugyokozo kihonchosa in Japanese）2007 and 2017. In the analyses, the occupations are ranked into five quartiles based on the average income of the occupations, and the changes in the composition of each quartile over the 10-year period are shown as patterns of occupational change by sex and educational background.

The results show that there has been no evidence of polarization, but a moderate upgrading of the occupational structure, with a decrease in the “middle” quartile and an expansion of the “upper middle” and “top” quartiles. Notably, the expansion of the top quartile was primarily contributed by women with university degrees. In addition, healthcare-related occupations have increased their share across a wide range of the occupational structure. While the polarization hypothesis in Western countries often focuses on the impact of computer technology and the influx of immigrants on the occupational structure, the results of this paper suggest that in the 21st century Japan, occupational changes have been influenced more by the expanding demand for eldercare services outside the home and the expansion of women's employment.