Foreign workers will ease Japan’s labour shortage

Significance Near-stagnation in wages is difficult to reconcile with reports of a very tight labour market in which firms struggle to hire. The answer lies partly in much higher levels of foreign workers than recognised by official statistics. Impacts Government surveys consistently demonstrate that real wages are falling after accounting for industry and demographic characteristics. Female workforce participation rates for ages 45-54 and 55-64 are at the highest ever, evidence of a strong response to labour demand. Part-time workers continue to suffer a 40% wage penalty compared to regulars, even accounting for age, industry, gender and firm size.