The Deregulation of Temporary Employment and Workers’ Perceptions of Job Insecurity in Japan

In Japan, non-regular employment, such as part-time and temporary work, has increased as a proportion of the workforce in recent years. This paper examines whether the expansion of temporary employment has caused an increased perception of job insecurity among existing workers. I exploit the temporary staffing deregulation of 2004, which allowed temporary agency staffing for production line work in manufacturing, and use a difference-in-differences (DD) methodology to identify the impact of the legal change on changes in perceptions of job insecurity among low-skilled manufacturing workers. I find that the temporary agency staffing deregulation contributed significantly to a rise in perceived job insecurity among low-skilled manufacturing workers.