The Impact of Sectoral Shifts on the Unemployment Rate of Different Age Groups

This paper examine Lilien’s sectoral shifts hypothesis for Japan for different age cohorts. Previous studies of the sectoral shifts hypothesis for Japan have for the most part concentrated on the relationship between aggregate unemployment and sectoral shifts, and are typically not supportive of the hypothesis. However, recent increases in the unemployment rates of the young and the aged suggest a need to reexamine the hypothesis for different age groups. It is found that sectoral shifts have a short-term positive effect on the unemployment of aged male workers and the effects increase in times of recession.