Institutional Linkage between Schools and the Labor Market in Japan: Safety Net or Root of Inequality Wataru Nakazawa Osaka University International Sociological Association RC28 summer meeting, University of Virginia ISA RC28 summer meeting /8/13

Contents Overview Changing in the Japanese Transition System Data, Method, and Variables Result of Analysis Discussion ISA RC28 summer meeting /8/13

The Japanese Transition System Smooth transition from school to work Graduation in March Start working in April Start job searching activities employer’s promise Education (in School) Labor Market (Regular worker) ISA RC28 summer meeting Smooth transition 2012/8/13

Background of Research on Transition 1.Low dropout rate High school dropout rate in Japan…2% (on average) Japanese place a high value on educational backgrounds, and it is crucial to enroll high-ranking high schools. If students are admitted to low-ranking high schools, it may be difficult to maintain incentives for their future, and the dropout rate would increase. But it does not happen. →some mechanisms to maintain incentives in school-to-work transition? ISA RC28 summer meeting /8/13

Background of Research on Transition 2. Low unemployment rate of youths (the 1980s) The market model criticized that the linkage between school to work would cause the cronyism, limit competition, and raising costs. However, this linkage has been common in Japan. →This linkage compensates for lack of information about each other. This makes transition smooth and efficient. ISA RC28 summer meeting /8/13

Recent Change ISA RC28 summer meeting /8/13

Placement Procedures (High school) Institutional Linkage between Employers and Schools ISA RC28 summer meeting employer Public Employment office High School Recruit information Recruit information Recommendation 2012/8/13

Placement Procedures (College) Less organized. Recommendation by professors (only in engineering or natural sciences) Alumni networks (often observed among elite university graduates and leading large companies) →semi-institutional linkage (Kariya, 1998) College placement offices introduce information about recruitment to their students. Free application through internet. ISA RC28 summer meeting /8/13

Hypothesis Institutional Linkage →Matching between applicants(schools) and employers will be successful. Recruits who obtained regular jobs mediated by schools are less likely to leave their first jobs. ISA RC28 summer meeting /8/13

Problems of Previous Research 1.Institutional linkage cannot be applied to other nation’s labor market. 2.Data was too old to consider recent changes. 3.Differences in placement procedures between high schools and colleges were not considered. 4.The theory of institutional linkage presupposes that regular workers enter the internal labor market which provides the opportunities for OJT, promotion, and a salary increase. →In the gender-segregated labor market, most female workers have been excluded from the internal labor market. Why women also follow this placement system? ISA RC28 summer meeting /8/13

Data Japanese Life Course Panel Survey (JLPS) Institute of Social Sciences, University of Tokyo. Nationwide, multi-stage sampling of people aged 20 to 40 in Started in 2007, followed up annually. The detailed information about educational backgrounds was collected in I restricted the sample of respondents who answered these questions on the 2 nd wave and who had high school (N=779) and higher educational backgrounds (N=773). ISA RC28 summer meeting /8/13

Definition of The Key Variable Who used the institutional linkage? How we define the institutional linkage? How the respondent found his/her first job? (1 st wave) Respondents checked the following answers “introduction by alumni at my school” “career center or teacher at school (including school recommendation)” →school-mediated job hunting ISA RC28 summer meeting /8/13

Selection Bias? Not all students use the institutional linkage. If we find a difference in the retention rate at the first workplace, it does not always imply that school-mediated job hunting has an actual positive effect on remaining the first job. A students who used the linkage originally had heterogeneous characteristics from a person who did not use this linkage might reflect the different retention rate. →Propensity score matching (Rosenbaum and Rubin, 1983; Guo and Fraser, 2010) ISA RC28 summer meeting /8/13

Estimation of Propensity Scores Dependent variable = having used school-mediated job hunting or not Independent variables = first job entry cohort, high school course, region where the respondents lived, number of books, household economic circumstances (high school graduate samples), self- reported class attendance, self-reported academic grades, attitudes toward study and club activity, experience of ronin, college type, region where the college was located (college graduate samples), self-reported academic achievement at senior year, high school’s approximate percentage of advancement to universities, high school type (both samples) Binary logistic regression models Matching method =nearest neighbor matching within a caliper of 0.1 ISA RC28 summer meeting /8/13

Propensity of Using School-Mediated Job Hunting High school graduatesCollege graduates ISA RC28 summer meeting /8/13

Kaplan-Meier Curves of Retention Rates of First Job ISA RC28 summer meeting /8/13

Auxiliary Analysis Competing Risk Hazard Model (retention rates of the first job) Dependent Variable’s category 1. a person who obtained a regular job immediately after leaving first job. 2. a person who obtained a non-regular job immediately after leaving first job. 3. a person who did not obtain any job. ISA RC28 summer meeting /8/13

Findings Contrary to my hypothesis, there was no significant difference in retention rates as to whether or not they used the institutional linkage among high school graduates and male college graduates. Only female college graduates had a positive effect of school- mediated job hunting on the retention rate of the first job. According to the competing risk hazard model, male high school graduates who obtained their first jobs are more likely to leave their first jobs without having new jobs. ISA RC28 summer meeting /8/13

Discussion In Japanese society, a smooth transition from school to work is important because failures in the early stages of a career affect the career negatively. Institutional linkage reduces the probability of graduation without obtaining regular jobs. While students tend to concentrate on well-known large companies, there are many small- and middle-sized companies that look for recruits. Institutional linkage compensates for the demand-and-supply mismatch. Employers still be putting more thought into the selection of female workers, particularly candidates as leaders. It might be difficult for high school graduates to have a prosperous future by remaining in their first workplaces and learning skills because the working conditions worsened due to bad economic conditions. ISA RC28 summer meeting /8/13

Thank you for your attention! ISA RC28 summer meeting /8/13