More than half of Japanese who are laid off will still be out of work a year later, an international report said on Monday, adding firms must be more flexible if Japan's economy is to improve.
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Around 1.4 percent of workers lose their jobs each year, with older, less educated employees and those on temporary contracts at highest risk of remaining jobless
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On average between 2002 and 2013 only 48 percent of those who are retrenched found a new job within 12 months, the report said, adding those who do find employment suffer an average 20 percent cut to their income.
The trend persists for the next three years, and "even four years after the displacement, their earnings are about 15 percent lower than they were,"
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Deregulating the jobs market is a key plank of Abe's plan to turn around the world's third largest economy, with rigid rules on hiring and firing sometimes blamed for the national flat-footed responses to changing global markets.
Supporters say a more flexible workforce would better allow families to look after children and the growing ranks of elderly, as well as permitting firms to adapt more quickly.
But critics say reforms run the risk of taking away job security.