Labor Policy Keiichiro HAMAGUCHI

Chapter 2 Labor Market Policy

Section 2 Employment insurance system

(1)Unemployment Benefit (a) Historical Overview ILO Convention No. 44 on unemployment benefit adopted in Retirement Funds and Retirement Allowances Law enacted in Unemployment Insurance Law enacted in Term of benefit: 180 days.

1955 revised UI Law distributed the term of benefit from 90 to 270 days according to length of service Employment Insurance Law distributed the term of benefit from 90 to 300 days according to age revised EI Law introduced length of service again revised EI Law introduced reason of job loss (voluntary quit: 180 days).

(b) Legal nature of unemployment benefit As a social insurance scheme: to compensate the lost income of the jobless As an employment policy instrument: to assist the jobless to be re-employed Subjective requirement of willing to work is difficult to distinguish from pretending. Moral hazard has been the central issue.

Benefit rate of basic allowance Amount of daily wages Benefit rateBasic allowance/day \2,070 - \4,08080%\1,656 - \3,264 \4,080 - \11,82080% - 50%\3,264 - \5,910 \11,820 - \15,55050%\5,910 - \7,775

Term of benefits for the ordinary unemployed Less than 1 year 1 to 4 years 5 to 9 years 10 to 20 years 20 years or more The generally insured 90 days120 days150 days Persons with difficulty or disability days300 days days

Term of benefits for the unemployed as a result of bankruptcy or dismissal, etc. Less than 1 year 1 to 4 years5 to 9 years 10 to 20 years 20 years or more Younger than days 120 days180 days days210 days240 days days270 days days240 days270 days330 days days180 days210 days240 days

(2) Employment-related benefits Childcare Leave Benefits are paid to workers who take childcare leave under 1 (benefit rate: 25%, 40% in 2000, 50% in 2007 revision). Continued Employment Benefits for Older Workers are paid to older workers working after mandatory retirement age (benefit rate: 25%, down to 15% in 2003). Educational Training Benefits are paid to workers who take training course (benefit rate: 80%, 40% in 2003, 20% in 2007 revision).

(3) Employment subsidies Employment Adjustment Subsidy is paid to employers who, without dismissals, adopt measures as temporary leave with pay, in-house training, temporary transfer to other companies (half of paid wages). Specified Job Applicant Employment Development Subsidy Regional Employment Development Subsidy Career Formation Promotion Subsidy