Problematic transitions from school to employment ...

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Problematic transitions from school to employment: freeters and NEETs in Japan and Germany a

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Matthias Pilz , Kirsten Schmidt-Altmann & Mikiko Eswein

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Department of Economics and Business Education, University of Cologne, Cologne, Germany b

ADG Business School, Schloss Montabaur, Montabaur, Germany

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Department of Social Science, Technical University of Kaiserslautern, Kaiserslautern, Germany Published online: 14 Oct 2013.

To cite this article: Matthias Pilz, Kirsten Schmidt-Altmann & Mikiko Eswein , Compare: A Journal of Comparative and International Education (2013): Problematic transitions from school to employment: freeters and NEETs in Japan and Germany, Compare: A Journal of Comparative and International Education To link to this article: http://dx.doi.org/10.1080/03057925.2013.835193

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Compare, 2013 http://dx.doi.org/10.1080/03057925.2013.835193

Problematic transitions from school to employment: freeters and NEETs in Japan and Germany Matthias Pilza*, Kirsten Schmidt-Altmannb and Mikiko Esweinc a


Department of Economics and Business Education, University of Cologne, Cologne, Germany; bADG Business School, Schloss Montabaur, Montabaur, Germany; cDepartment of Social Science, Technical University of Kaiserslautern, Kaiserslautern, Germany In the international debate surrounding transitions from school to employment, Japan and Germany are regularly cited as examples of success. This article draws on the Japanese concepts represented by two problematic groups – freeters and NEETs – to demonstrate that over recent years, young people in both countries have also been facing serious problems with the transition process. Interpretation of empirical data also, however, reveals a number of contrasts between them. We focus here on differences in their educational systems and on the role each system plays within its own society. The article also uses divergent recruitment practices and employment structures as vehicles for comparison and interpretation. Keywords: Japan; Germany; transition; freeters; NEETs; youth

Introduction Young people in most twenty-first-century industrialised nations face increasing uncertainty over their entry into the labour market. Young adults encounter considerable difficulties and obstacles at transition points in their lives, that is, when they move from school into training and, subsequently, from training into employment (OECD 2000). Japan and Germany have traditionally been perceived, and regularly cited in the literature (OECD 2000), as industrialised countries with a particularly good record of success in managing young people’s transition from education to formal vocational or further academic training and thence into the labour market. They have therefore been chosen as the focus for this research. A number of earlier studies tackled similar issues. For example, an international comparative study focusing specifically on these two countries reveals some particularly interesting parallels. Ryan (2001) uses a set of discrete variables to show that they achieve particularly successful *Corresponding author. Email: [email protected] © 2013 British Association for International and Comparative Education


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transitions, noting that, ‘Japan and Germany, with their impressive schoolto-work performance, have both developed effective mass education, with high means and low variances of achievement in compulsory education’ (72). He also mentions, ‘The appeal of German and Japanese transition institutions lies … not in low youth turnover per se, but in making possible the wholesale transition of school-leavers to employment and work based training’ (60). Stern and Wagner (1999, 8 ff.) also focus on Japan and Germany in their international research into youth unemployment, explaining the low levels in these two countries by, among other factors, marked acceptance by employers of responsibility for training and companies’ involvement in education and training policy processes. Until very recently, Japan was widely perceived as having successful transition processes (Kosugi 2001, 52). Official unemployment rates in the country had been low for a very long time, rarely exceeding 2%. However, the economic collapse of the 1990s, followed by another soon after 2000, saw unemployment in Japan rising to a record 4.5% in 2011 (Ministry of Internal Affairs and Communications 2011b). Youth unemployment was particularly hard hit, increasing to 9.4% in 2010 (Ministry of Internal Affairs and Communications 2011a). Germany’s employment system was also, however, feeling the effects of changes in the economic environment and social values, with atypical patterns of work becoming increasingly common. For example, youth unemployment in Germany in 2009 was 11% (BIBB 2010). Focus of the study In this study, we shall scrutinise in greater detail recent obstacles to successful transitions in both Japan and Germany against the backdrop of the Japanese situation. This central approach is, in our view, particularly important for two reasons: first, the literature in this area is very limited, but, second, the literature that does compare Japan and Germany in this area focuses almost exclusively on the advantages of the transition systems in the two countries. Furthermore, this approach provides a basis for comparing the reasons underpinning the obstacles to successful transition in both countries and for explaining the similarities and/or differences identified. However, before the research questions can be tackled in depth, we need to define the scope of the research. As noted above, we intend to approach the issue from a Japanese perspective. This is appropriate in the case of a broadly framed research field so that the findings for one country can be used to put boundaries around the findings from the other country and so illuminate the comparative research question. Two particular problem groups have emerged in Japan, ‘freeters’ and ‘NEETs’ (see below). We have selected the phenomena represented by both


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terms for our study because they underpin the debate in Japan about increasingly unsuccessful transitions. We shall be focusing on two aspects. The first is the difficulty of distinguishing between these two groups in Japan because they partly overlap as individuals move between them. The second is that the explanatory models used for their transition process by young people in these groups can be fully understood only when seen in combination (see, for example, also OECD [2009], especially page 45).1 We would also point out that although the terms used to refer to these two phenomena occur in other parts of the world, they have a very distinct definition and context in Japan, and this makes it impossible to transfer definitions and models from other countries, such as the approach taken to NEETs in English-speaking countries (see, for example, Inui, Sano, and Hiratsuka 2007). This also makes it more difficult to establish comparisons with Germany. As a result, Germany has virtually no relevant research literature on NEETs and freeters, so we shall apply the Japanese descriptions of these two groups also to Germany, albeit with modifications to adapt them to the situation in Germany. Our main starting point for further, more detailed research will therefore be the Japanese definition of both groups. We shall begin by explaining it and comparing it with the potential set of German identities.

NEETs The term ‘NEETs’ derives from the English abbreviation for those ‘not in education, employment or training’, a term coined in 1999 by the UK’s Social Exclusion Unit to refer to 16–18-year-olds (Lunsing 2007, 105). By 2003, the term had been adopted in the Japanese employment context. However, it was used there to reflect Japan’s economic and political environment and defined differently (Toivonen n.d.). Thus, NEETs in Japan are: persons not in employment, that is, those who engage in no, or only minimal, paid activity, are not seeking such activity, are not running a household and are not actively engaged in any kind of education or training; young people who are not seeking work and are not therefore registered as unemployed; aged between 15 and 34; single (the definition excludes those who are married, who may receive financial support from their spouse) (MHLW 2009, 8). NEETs in Germany are defined by a different age criterion: they include those aged between 15 and 30 (OECD 2010c; Wingerter 2011, 104).


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Freeters The term ‘freeter’ is a neologism composed of the English word ‘free’ and the German word Arbeiter (worker). Freeters pursue activities that can be described as atypical employment arrangements. When they leave school, freeters do not obtain permanent employment and work on temporary contracts of various kinds, including part-time employment and casual, low-paid jobs with restricted hours, often referred to in both Japanese and German as Jobben (Honda 2005, 7; Kosugi 2001, 57). Japanese freeters initially enjoyed public support and recognition for their free, individualistic lifestyles, but this rapidly gave way to a widespread perception of them as lazy and selfish. In fact, Japan distinguishes between two separate groups of freeters in relation to their attitude towards non-standard employment: the first generation, those seeking employment during the economic boom (from the late 1980s to the early 1990s), were perceived relatively positively, but the second generation, those pursuing this form of employment during the recession (2000 to the present day), were viewed more negatively (Eswein and Pilz 2012; Kosugi 2008). The debate around increasing inequality of income and the demise of an economy based on small and medium-sized businesses has now shifted the perception of freeters again and they are currently seen as victims of an increasingly deregulated labour market (Hommerich 2007, 2009; Honda 2005; Kosugi 2001). The following characteristics typify freeters: aged 15 to 34; employment status: part-timers, in low-paid, precarious employment or unemployed but seeking or wanting part-time or temporary work; not in education or training and not running a household on a full-time basis; unmarried (if female) (MHLW 2009, 8). Against this backdrop, we need to look more specifically at the features of both groups in relation to part-time work and low-paid, precarious work. The official definition used by Germany’s statistical service defines ‘part-time work’ as all jobs representing an employee’s main occupation that require 20 or fewer hours’ employment a week (Statistisches Bundesamt Deutschland 2011a) and where the individual is not in education or training. Another similar concept, Nebentätigkeit (casual employment), finally, refers in both countries to casual employment, such as unskilled work in supermarkets. In Germany, Nebentätigkeit falls under the definition of low-paid employment for restricted hours, with a distinction between two different

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concepts. First, the job may be defined by the monthly payment, in which case it is a low-paid job, or it may be defined by the duration of the contract, in which case it is a short-term job. In general parlance, such jobs are also known in Germany as ‘mini-jobs’, the term reflecting the fact that individuals with such jobs may earn no more than €450 a month. Temporary work, such as holiday or sickness cover, is considered short-term employment (Jung and Thiemann 2006, 11) and limited to two months or 50 working days in any calendar year. We have retained the concepts ‘part-time work’ and ‘casual employment’ (Nebentätigkeit) for Germany because there are no precise comparative data and, despite the statistical differences that exist, so that – as set out below – we can create as close a comparator group as possible.

Theoretical background and research questions It is therefore appropriate to focus these transition issues and challenges on relevant models of transition research. However, since these models derive from a very wide range of disciplines, including labour market research, education economics, sociology and educational sciences (see Bynner and Cbisbolm 1998; Raffe 2008), we need to narrow the field somewhat. We therefore intend to take two divergent approaches that underpin all research studies into Japan and Germany. These focus on either economics or labour market approaches. The best known in this context is the OECD (2000) study, which uses such parameters as educational qualifications, level and duration of youth unemployment and types of employment (31) and correlates them with the education and training systems and labour market system in the relevant country. Ryan (2001) takes a similar approach, using many of the same parameters and also drawing on the same three systems. Further approaches draw rather on the sociology of education: one of the best known, which also focuses on Japan and Germany, is Müller and Shavit (1998), who researched these two countries using the standardisation, stratification and vocational specificity of their educational systems as their major criteria (6–10). This approach therefore also reflects factors including status and prestige and access to education and training. We attempt to bring these two approaches together, as has been proposed by Heinz (1999), for example: Transition research focuses on structures and institutional arrangements as well as individual orientations and decisions relevant to explaining individuals’ movement from one life phase to another. The timing, duration, and outcomes of transitions depend not only on social origin, gender, and education level but also on opportunities for employment and lifelong learning. Access to prestigious schools and universities and to attractive occupational careers is determined not only by individual achievement but also by both social origin and

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gender and the relative social accessibility of the occupational structure. In expanding stratification and mobility research, transition studies combine the analysis of structurally defined opportunity contexts and socio-psychological dynamics, such as goals, orientations and action strategies of young adults and their social networks … (8)

The research will therefore focus on the following research questions, which subsequently give rise to four hypotheses:


(1) How can the phenomena of freeters and NEETs in Japan and Germany be quantified? (2) Within the broad approach adopted here, what are the underlying reasons for freeters and NEETs? We intend to investigate these two research questions by means of four working hypotheses deriving from the research fields of ‘economics and labour market approaches’ and ‘sociology of education’ (see above). In line with the approach described above, the four hypotheses will be based on the debate in Japan (see below for more detail) and then projected on to Germany. The hypotheses are: low levels of general education, structural change in the labour market, company recruitment practices, and changes in values and attitudes to work. To answer these questions and test these hypotheses, and to compare the two country situations, we use the comparative approach formulated by Seifert (2011, 50), which we have adapted to the specific profile of the groups under consideration. The following criteria and benchmarks have been used: (1) data on the size, structure and evolution of NEETs and freeters in Japan and Germany; (2) data relating to the transition structures in both countries and the difficulties encountered by young people entering employment; (3) empirical findings on the factors influencing the identity of NEETs and freeters in Japan and Germany.

Methodological approach In the single large-scale study exploring the position of freeters in Japan and Germany, Hommerich (2007, 2009) selected students as the comparator group in both countries. This approach is not, however, completely unproblematic: in Germany, unlike Japan, students are a much smaller transition group than vocational trainees and have different transition patterns (Pilz and Alexander 2011).


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In this article, we therefore focus on a different comparator group – the entire age cohort over the transition period under consideration (see below). This enables us to avoid the problems arising from an excessively narrow focus on what may be non-typical sub-groups. The data and empirical findings were collected primarily from research studies and official surveys. It should be borne in mind that in Japan, ‘NEET’ and ‘freeter’ are officially recognised terms, so these two concepts have already attracted significant attention from researchers and official agencies compiling statistics in the fields of both educational policy and labour market policy. No corresponding data exist for Germany – NEETs and freeters are phenomena that have yet to find their way into official statistics in this context in that country. We have therefore collected information about the two groups through analysis and consolidation of comparable data, to enable us to make a comparative analysis. Numbers and evolution of NEETs and freeters Regardless of differences in the definition of the two groups and the way they are treated for statistical purposes, NEETs and freeters are significant groups in both Japan and Germany (Figure 1). The number of freeters more than quadrupled from 500,000 in 1982 to 2,080,000 in 2002. Over the past few years, the number of freeters in Japan has remained fairly stable, with a small drop before the economic crisis in 2008 triggered a further rise (Eswein and Pilz 2012). There is also evidence that the situation is worsening further, specifically in the wake of the earthquake disaster that hit Japan in March 2011. The values in Figure 1 for German freeters require a note of explanation on data-collection. Official statistics in Germany do not include freeters, so the data were compiled indirectly for the last few years only, using the micro-census, a set of representative official population and labour market statistics (Statistisches Bundesamt Deutschland 2012a). These data are, however, difficult to extract, so figures are available only for 2007 and beyond. This tailored analysis identifies as freeters those working part-time or in low-paid jobs with restricted hours (see above for more on the concepts used). Those who fell into both categories were removed from the calculation. The analysis shows that in 2007, 1,102,000 individuals could be identified as freeters; two years later, this had fallen slightly, to 1,041,000. The absolute figure for the number of NEETs has remained roughly constant over recent years in both Japan and Germany. However, it is also evident that the phenomenon is growing long-term in Japan, where the number of NEETs rose by one third, from 480,000 to 640,000, between 1999 and 2009.

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in millions

0.8 0.6 0.4 0.2 0 year NEETs in Japan

NEETs in Germany

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2.5

1.5 1 0.5 0 year freeters in Japan

freeters in Germany

Figure 1. Trends in the number of NEETs and freeters in Japan and Germany (in millions). Sources: MHLW (2011), MHLW (n.d.), OECD (2010a), Statistisches Bundesamt Deutschland (2012a).

As with the freeters, it is important to specify how NEETs figures for Germany were derived. The Figure 1 values for Germany are OECD (2010a) data that were, however, collected and evaluated by the German statistical service for micro-census purposes. To sum up, it is clear that, although levels in Japan are somewhat higher, the numbers for both groups in both countries are significant in absolute terms and are, therefore, relevant both for research methodology and in relation to education and training policy. To establish a comparison between Japan and Germany, the values can now be compared with the total numbers employed in each country (Figure 2). This shows that in 2009, 12.3% of all 15–35-year-olds employed in Japan were freeters. The corresponding figure for Germany was 12.9%, meaning that the two labour markets include comparable numbers of freeters. In 2009, NEETs accounted for around 1.3% of all 15–30-year-olds in employment in Germany (authors’ own calculation), while the figure for


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Figure 2. NEETs and freeters as a percentage of all 15–35-year-olds in employment in Japan and Germany in 2009. Source: authors’ own representation. German figures for NEETs based on statistical calculation and assessed for 15–30 age-group only.

Freeters in Japan

NEETs in Japan 200 150 100

NEETs in Germany

1000

Freeters in Germany

800 600 400

50

200

0

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Figure 3. NEETs and freeters by age-band in Japan and Germany in 2009 (in thousands). Figures for Germany include NEETs up to the age of 30 on the basis of a statistical calculation. Sources: OECD (2010a, 2010b), MHLW (2011), MHLW (n.d.), Statistisches Bundesamt Deutschland (2012b).

Japan was around 2.1% of the total number of 15–35-year olds in employment (authors’ own calculation). These levels are of a very similar order of magnitude. It can be concluded, therefore, that in both Japan and Germany, freeters and NEETs make up a similar proportion of the labour market and represent significant groups.


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Figure 3 illustrates the distribution of NEETs and freeters by age-band in 2009 and reveals relatively similar distribution patterns for Japan and Germany, with those over 20 making up the largest sub-group in both countries. This under-representation of the younger age-bands is easily explained. Under German law, students must remain in education until they are 18. The existing German system for the transition from school to employment is also significant here (Beicht 2009) as it provides preparation for vocational training and initial basic vocational skills. The system is therefore designed to help young people to acquire the maturity necessary for successful vocational training and represents a bridge from compulsory education into training (BIBB 2010). In Japan, meanwhile, the education system continues to expand, with intensive competition between institutions, and young people now enter employment at a later age than has traditionally been the case. After nine years of compulsory education, more than 98% of all Japanese 15-year-olds embark on further education or vocational training (MEXT 2010).

Interpretation of the data Against the backdrop of the broader context of the issues surrounding transition, the data will now be interpreted and the second hypothesis discussed. Background to transition systems in Japan and Germany Before the data can be interpreted, it is essential to outline the arrangements for transition from school to employment. The first point to note is that the Japanese vocational training system and labour market has a number of features that distinguish it from the system in many European countries (OECD 2011b). One of the most marked characteristics of Japanese society is the high status attached to education, which is seen as being the bedrock of a successful career, social advancement and prestige (OECD 2010d). Indeed, some 98% of all Japanese school students move on to further education or vocational training when they have finished their compulsory general education. Moreover, most Japanese companies do not require school-leavers to have vocational skills, which they are expected to acquire only during employment (OECD 2010d). For this reason, selection criteria and the recruitment process focus primarily on applicants’ general knowledge and on general attitudinal skills, including hard work, perseverance and loyalty. This means that all school-leavers have an opportunity to succeed through effort and to secure a place to study at the country’s leading educational institutions (OECD 2010d, 141 ff.). Long-term employment and career


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stability in Japan therefore depend to a substantial extent on the type of formal qualifications an individual has and the formal or informal status of the qualification-awarding institution (OECD 2010d, 141). The process of transition from education to employment in Japan is characterised by a very early search and recruitment phase, intensive study within the education system and high levels of mutual trust between educational institutions and companies (OECD 2000, 9). In practice, therefore, company vacancies are not advertised publicly but individuals with very specific educational histories are targeted for recruitment (Kariya 2010; OECD 2000). In this context, the transition process for young Japanese has undergone major changes over the past few years in particular as a result of shifts in market conditions and the general employment situation: around one third of all school-leavers or new graduates now fail to find a permanent job immediately after completing their education (MEXT and MHLW 2010). In Germany, by contrast, vocational training has traditionally been the route followed by the overwhelming majority of school-leavers (BIBB 2010). More specifically, the figures show that some 75% of all schoolleavers moving on to vocational training enter the ‘dual’ system, which combines periods of classroom and ‘on-the-job’ training, while the rest opt for full-time training in a vocational school or some other form of vocational training (Höckel and Schwartz 2010, 9). There is no de facto restriction on access to vocational training, although in practice individual occupations have their own specific requirements, which may in some cases include educational prerequisites (CEDEFOP 2007). Over recent years, evidence has been growing that more and more young people are failing to make successful transitions from compulsory education to vocational training. The reasons most commonly cited include their lack of the maturity needed to benefit from training and a shortage of training places (Frommberger 2009). Given the very high status of vocational training in Germany, this trend is impacting negatively on young people’s subsequent ability to move into employment. Finally, comparison of the transitional structures in place in Japan and Germany reveals some differences but also substantial similarity. We shall start by outlining the key differences. Unlike Japan, Germany does not consider a general school-leaving qualification adequate for access to the labour market, and young people without formal vocational training or a degree are more likely to be unemployed or else to end up in low-paid and/or part-time employment (BIBB 2011). Moreover, a close relationship exists in Germany between specialised training and the areas in which an individual is subsequently employed, a link that is strengthened by what is known in German as the Berufskonzept, a concept of employment and training based on the structural integrity,


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uniformity and systematic nature of the skills development process (Greinert 2007; Ryan 2003). As a result, early vocational skills development is rated highly in Germany. In Japan, by contrast, general knowledge and appropriate attitudinal skills are rated more highly by companies than the early acquisition of specialised skills (OECD 2010d). Despite these marked differences between their educational and employment systems, however, young people in both Japan and Germany now face growing problems in accessing employment, with many finding that entry into permanent employment is no longer a linear process and that they face uncertainties and setbacks. There are a number of reasons for these difficulties, and not all young people are able to overcome them (Honda 2005; Kosugi 2001), failing instead to meet the requirements imposed on them. For them, the practical alternative is complete withdrawal from the labour market or a transfer to a non-standard form of employment because the expectations on them are then substantially lower. Both NEETs and freeters are major factors in this context. Four characteristics of NEETs and freeters The characteristics demonstrated by NEETs and freeters are influenced by a number of factors. Germany has, as yet, no specific empirical data on these groups, and the academic debate about transition from school to employment relies on other forms of argumentation, so to enable a direct comparison, we shall now focus on the arguments advanced in Japan and compare them with the situation prevailing in Germany. The four hypotheses set out below represent the arguments currently dominating the debate in Japan (cf. Genda 2007; Honda 2005; Kosugi 2001). In restricting our framework in this way, we do not reject other approaches; however, as they are less useful to a systematic comparison between the two countries, we shall not be including them here. Similarly, further factors could also be adduced in our discussion of the German situation (CEDEFOP 2007, 30), but as these do not relate specifically to the discussion of freeters and NEETs, we shall not explore them further here. NEETs and freeters have low levels of general education This first hypothesis posits that levels of general education are a key factor in the risk that any individual will become a NEET or a freeter, something that is borne out by statistical evidence (Inui 2005; Kosugi 2001, 2008; Martin and Quintini 2006). Scrutiny of the educational history of NEETs and freeters in Japan shows that individuals with low levels of general education are more likely to be found in both groups. Research into the employment status of young people conducted in Japan in 2002 confirms this hypothesis. It found that young people whose


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highest level of education was completion of junior high (middle) or senior high school were four times more likely to become NEETs than those who had higher levels of education, such as at junior college or university (Inui 2005; Inui, Sano, and Hiratsuka 2007). Much the same is true of freeters. University graduates form a small minority (11.1%) of freeters, whereas those whose highest level of educational qualification is from senior high school make up 52.6% of this group (Kosugi 2008, 8), a majority and a disproportionate percentage. The most recent survey carried out by the Japan Institute for Labour Policy and Training in 2010, also confirms that educational level is a major influence. Of those surveyed who had completed only senior high school education, 40.7% were considered as part of the peripheral workforce, compared with just 17% of those who had a university degree (the survey was restricted to those aged between 15 and 34) (JILPT 2011, 79). The number of young people with higher-level school-leaving qualifications or degrees is particularly high in Japan and has risen sharply over recent decades (OECD 2010c), so it is initially surprising that, in the 1990s and early 2000s, the number of NEETs and freeters in the country was rising (see Figure 1). It should, however, be borne in mind that the transition system needs to be seen not only from the ‘supply’ side – that is, the applicants’ perspective – but also from the ‘demand’ side – that is, the employers’ perspective. Specifically, the trend towards demand for higher qualifications is likely to have a particularly damaging effect on young people without higher-level academic qualifications, as we demonstrate below. In Germany, too, a low level of basic education is a key factor in the difficulties that young people experience in entering the labour market. In particular, those with poor skills levels – individuals with little available human capital – are frequently to be found in employment situations that typify freeters. Of those without a recognised vocational qualification, 24.8% work part-time and 17.1% are in low-paid, restricted-hours employment (Statistisches Bundesamt Deutschland 2009a). By contrast, 15.2% of those with vocational training are working part-time and just 7.8% are in low-paid work with restricted hours (Statistisches Bundesamt Deutschland 2009a), a clear illustration of the advantages conferred by vocational qualifications. Those who have skills can take a greater variety of jobs, while the in-company training they have undergone and their personal experience make them significant human capital for companies. A comparison of Japan and Germany shows that data for both countries confirm that level of education is a key determinant of successful integration in educational institutions or companies and the labour market. It is, however, important to note in this context that in both countries, much depends on the educational level with which individuals start their working life. This is particularly the case with freeters.


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Japanese freeters as a group are dominated by those whose highest educational qualification is a senior high school qualification. In Japan, senior high schools can be compared with the German Gymnasium, an academic institution preparing students for the university entrance qualification (Abitur), although the Japanese senior high school is a less elitist type of school. In contrast with Germany, where only a small percentage of school students attend a Gymnasium, it is the norm in Japan for most students leaving middle school to go on to senior high school to continue their education (Stimac 2004, 66). Meanwhile, those not progressing to vocational training in Germany tend to become freeters, taking up part-time and low-paid precarious employment. It is also important to note that in Germany, academic qualifications increasingly have little, if any, influence on success in employment terms – young Germans are more likely to have good employment prospects, even if they lack formal educational qualifications (Teichler 1998, 175). In Japan, by contrast, young people outside standard employment miss out on the opportunities for in-company training, so they are unable to develop vocational skills and expertise and, hence, find their access to permanent jobs blocked (Ito 2011, 189). In relation to hypothesis one, then, NEETs and freeters in both Japan and Germany are typically characterised by low levels of formal education, with both groups most commonly having low-level academic qualifications that determine their social and/or employment status.2 Structural change in the labour market Some Japanese researchers see structural change in the labour market and the resulting changes in company recruitment practices as the key reasons for the rising numbers of NEETs and freeters (Genda 2007; Honda 2005). This hypothesis focuses, therefore, on labour market trends and how companies have changed their recruitment practices as a result. As in other industrialised countries, the labour market in Japan has come under intense pressure to adapt over recent years. This is reflected, among other things, in the increase in the proportion of non-standard employees in the workforce as a whole. Between 2000 and 2010, the number of employees on non-standard contracts rose by more than four million, to 17.1 million (OECD 2011a, 143). Closely linked with this is the increase in flexibility – that is, the labour market’s responsiveness to changes in the economic climate. Legislation has played a major part here, including the revision of the employment placement legislation in 1997 and the introduction of legislation on temporary agency workers in 1985. Current debate centres on the introduction of legislative regulation of dismissal (OECD 2011a, 14 ff.). As a direct result of these changes, some long-established elements of Japanese corporate culture (including the seniority principle and a


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guaranteed job for life) are no longer as self-evident as they once were. The main beneficiaries of these trends have been employers, who have been able to take advantage of greater flexibility combined with lower costs (Obinger 2009, 167). However, Japanese employees regard these forms of nonstandard employment as representing substantial uncertainty, fearing, for example, unstable employment and unpredictable income. In Germany, statistics show that current employment structures are dominated by a growing proportion of people with atypical contracts and low-paid jobs, including those outside the group of ‘freeters’ as defined for the purpose of this article. However, those currently most affected by this phenomenon are not young people (see Figure 1) but, in particular, older workers (see Figure 3). In 1997, 11.7% of all those in employment were working part-time, while 4.5% were in jobs with low pay and restricted hours (Statistisches Bundesamt Deutschland 2008, 11); 10 years later, the figures were markedly higher, at 16.4% and 9.2%, respectively (Statistisches Bundesamt Deutschland 2008, 11). Continuing flexibilisation of the German labour market means that it has become more able to accommodate such employment patterns, though at the cost of substantial insecurity and lower pay for sections of the working population. A linked factor is the option that companies have to turn full-time posts into part-time ones. While this is usually considered to be neutral in terms of overall employment levels, since employment opportunities are unaffected, the workers concerned pay the cost in terms of hours available and, of course, pay. To sum up, in both Japan and Germany, the labour market continues to change as a result of economic uncertainty, which has an impact on the availability of standard employment contracts within businesses and on company recruitment practices. In relation to hypothesis two, then, NEETs and freeters are phenomena that have emerged primarily as a result of structural change on the respective labour market in Japan. Companies in both countries typically react to these changes by increasing non-standard posts or by replacing standard working arrangements with atypical ones, and in Germany this has so far affected mainly older workers and those re-entering the labour market. Company recruitment practices The third hypothesis concerns changes in companies’ HR and recruitment policies. In 1992, Japanese companies advertised around 1,676,000 vacancies for senior high school graduates. By 2005, that figure had fallen to 245,000 as a result of labour market trends. In 1992, there were around 3.34 vacancies for every candidate, compared with an average of just 0.7 at present (Hori 2007, 31, 2009). Kosugi reaches similar conclusions on the basis of statistical research. She concludes that since the mid-1990s, Japanese


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companies have stopped recruiting senior high school graduates for whitecollar jobs. In Germany too, the general labour market situation has had a less than optimal effect on the recruitment situation for young people over recent years. Individuals with an incomplete school education or a problematic training record face challenges in finding appropriate jobs or, at an earlier stage, appropriate training courses. For example, between the mid-1990s and 2010, there was a persistent shortage of training places in virtually all sectors, with around 95 places per 100 people looking for training (BIBB 2011). According to a survey carried out in 954 training companies and extrapolated to all companies in Germany (IW Köln 2011), only 6% of all German businesses employ trainees with no formal qualifications, although the situation looks rather more positive for young people who have completed a middle-level qualification (the Sekundarstufenabschluss I or secondary diploma I), with around 56.5% of companies taking on trainees with this qualification. The reasons businesses most frequently cite include rising costs and increased expenditure combined with the need intensively to supervise young people with poor levels of general education. The mismatch between the availability of training posts and demand for them is a further factor: over the past few years, some 19,000 to 29,000 training posts a year have remained unfilled in Germany at a time when between 76,000 and 92,000 young people were seeking a training post (BIBB 2011). Reasons for this include regional differences, young people’s inadequate general education and their lack of educational maturity (Frommberger 2009, 131 ff.). Even when they have completed vocational training, however, young Germans may still face difficulty in finding permanent employment. A 2007 survey on behalf of the German Federal Ministry for Labour and Social Affairs asked young people aged between 18 and 34 with a vocational qualification to describe their progress to employment since completing their training. Of those questioned who had found employment, 37% reported being unemployed for at least one period, while 32% were now employed on fixed-term contracts and 21% had permanent but part-time work. One key finding was that just 28% of the sample had moved seamlessly into permanent, full-time employment after training (Fuchs 2008, 36). The impact of this is not directly reflected in higher numbers of freeters and NEETs in Germany (see Figure 1) for two reasons. First, under German law, all young people who have completed their compulsory secondary education but do not have the qualifications entitling them to move on to higher education and do not, therefore, have a training place (apprenticeship) must attend a full-time vocational school. Second, Germany has also put in place a range of state-funded safety-net measures for young people, designed to make it easier for them to move into vocational training within the apprenticeship system at a later stage (Schneider and Pilz 2001).

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In relation to hypothesis three, then, although state intervention can help offset transition deficits in Germany, employers have a major impact on the ability of young people to gain access to training and employment. Companies are increasingly likely to use comprehensive selection mechanisms when recruiting, and these mechanisms will not suit all individuals, leading in the worst cases to exclusion from the labour market. Changes in values and attitudes to work among young people The final hypothesis to be discussed here relates to changes in values and attitudes as the cause of the phenomena represented by NEETs and freeters. Most of the advocates of this hypothesis rely on empirical research. Studies conducted in Japan (see below) have shown, however, that NEETs and freeters can be typified differently, so it is important to consider their values and attitudes separately. Honda (2006, 47–49) argues that Japanese NEETs can be divided into two groups: those not seeking work and those unwilling to work (particularly individuals who want to prepare themselves for other courses, continuing training or periods abroad). It is not therefore the case that all NEETs do not want to work. A study by the Human Resources Development Department of the Ministry of Health, Labour and Welfare Japan (2011) supports this conclusion. It found, for example, that 28.7% of NEETs could not register as seeking work because of health problems that were, in some cases, caused by past activities hazardous to health or that had some link with shortcomings in the recruitment process that led to mental health problems (see also Honda 2006, 37). The situation with regard to freeters is rather different. A Japan Institute of Labour study in 2000 identified three different types of freeter: ‘moratorium’ freeters, who make no plans whilst at school for their future employment or their life more generally. ‘dream-pursuing’ freeters, who have an employment goal (for example, to be a singer) but cannot earn an adequate living from that occupation and who therefore earn money as freeters. This type also includes those forced to switch jobs to remain in the employment area they prefer. ‘no alternative’ freeters, who have so far been unable to realise their ambition to gain permanent employment in a company. This group also includes those pursuing a particular ambition (such as foreign travel) and who work as freeters to fund that ambition and those who have been forced by life events to accept atypical working patterns for a temporary period. Research conducted by the Japan Institute for Labour Policy and Training (2006) allocated a percentage value to each of these three types:


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the most common type of freeter was the ‘moratorium’ type, which made up 44% of all freeters, followed by the ‘no alternative’ type (31%). ‘Dreampursuing’ freeters made up just 25%. These data show that many Japanese freeters are forced into working part-time or in low-paid, precarious jobs.3 A White Paper produced by the Japanese Government’s Cabinet Office in 2006 found no evidence for a lack of motivation among freeters. The research questioned part-timers on their view of their work–life balance, with only 35% of respondents indicating that they always or usually prioritised their private life over work. The changing values and attitudes to work among young people have also been researched in Germany. Face-to-face research conducted in 2005 among 779 14–20-year-olds (Bertelsmann Stiftung 2005) showed that 63% of young people in Germany are willing to set aside private life and leisure pursuits in order to get on at work, while only 28% would refuse to invest in their careers at the expense of their personal life. A study of young people carried out by Deutsche Shell Holding GmbH (2010) produced similar findings. A further study provides evidence for the reasons for working part-time or in a low-paid job. The 2009 micro-census (Statistisches Bundesamt Deutschland 2011b) found a high proportion of individuals reporting that they worked part-time because they were unable to find full-time employment. This reflects the historical shortage of full-time posts in Germany: it has been estimated that for the past 20 years, Germany has had a shortfall of around 10 million standard posts. The figures we cite confirm that both Japan and Germany have young people who prioritise their private lives over work or who have little motivation to seek employment. They also show, however, that these young people are a minority and that their profile is by no means generalised. In relation to hypothesis four, then, youth culture has changed both in Japan and in Germany, but the data do not support conclusions relating to significant impact on young people’s values and attitudes to work. Honda (2005, 57) laments the prominence of prejudice against NEETs and freeters amongst policy-makers, noting that it is resulting in the exclusion of both groups. Conclusion Bringing together the findings for Japan and Germany, it is clear that the phenomena represented by freeters and NEETs have considerable relevance to the cluster of issues raised by transitions. The numbers in these groups in Japan increased consistently between around 1990 and 2000 and have remained at a high level since then. The numbers of NEETs in Germany have, however, remained relatively constant for many years (there are no comparable long-term statistics for freeters). Despite these statistical differences between the two countries, it is possible to identify interesting


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parallels between them that help shed light on the reasons why freeters and NEETs adopt their respective lifestyles. In both Japan and Germany, it is the case that young people with the lowest level of academic qualifications are particularly vulnerable to failed transition processes. Employers in both countries are increasingly seeking – and recruiting – high-quality staff, particularly because the current trend is towards higher-level school leaving qualifications. At the same time, against the backdrop of global adaptation processes in both these industrialised economies, labour markets and recruitment procedures are undergoing major change, with more flexible and – in some cases – precarious contractual arrangements becoming widespread. While these trends impact directly on young people in Japan, the German government has intervened with legislation and state subsidy of vocational training, shifting the focus of the problem on to older cohorts. All three aspects are, ultimately, based on the fact that in the past the numbers seeking employment have outstripped the number of vacancies, which has enabled companies to be more selective in the first place. The fourth hypothesis is, thus, disproved: findings in both countries demonstrate clearly that motivation and shifting values have not resulted in changing attitudes to employment and the search for a job. In conclusion, and against the backdrop of the findings reported here and educational and training policy initiatives, it is important to try to identify possible approaches to reducing the total numbers of freeters and NEETs. Japan offers courses to stimulate and develop good general attitudes to work (Honda 2006, 57; Ito 2012; Toivonen n.d.), but while these courses reflect Japan’s concentration on general skills as the underpinning of successful transition processes, they cannot solve the qualitative problem of a shortage of standard employment contracts (Honda 2006). Over recent years, Germany has offered a wide range of full-time vocational education courses. Defined as ‘transition system provision’, these courses run for one to three years (see Höckel and Schwartz 2010, 9; ReferNet 2011, 52). Since most individuals completing such courses do not enter the labour market directly on completion and, in fact, then seek a further training post, such courses are, borrowing a term from air travel, often referred to as ‘holding patterns’ (Beicht 2009). In summary, against the backdrop of the shortage of traditional jobs for new labour market entrants in both countries over recent years, neither the qualitative solution of general skills development offered in Japan nor Germany’s quantitative ‘transition provision’ is a sustainable long-term way of solving the problem. Demographic trends in both countries will, meanwhile, see a decline in cohort size over the next few years, relieving some of the pressure on the youth employment market (Statistisches Bundesamt Deutschland 2009b; Statistics Bureau Japan 2011); indeed, this trend is already evident in Germany (OECD 2011c).

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Against the backdrop of very high youth unemployment across the globe, our findings on freeters and NEETs in Japan and Germany represent a partial picture. Overall, the transition from school to work can currently be described as very positive in both countries compared with the situation elsewhere in the world. Ryan (2001) comes to a similar conclusion:


It is hard to understand the success of German and Japanese institutions in purely economic terms, whether individualist or collectivist. They have been mimicked elsewhere without producing comparable benefits. It may be that such institutions [as transitional areas – authors’ note] can flourish only in societies in which concern for the integration of youth into socio-economic life is widely shared and deeply felt, and that therein lies the fundamental source of their resilience and effectiveness. (83)

Nonetheless, it is also important that comparative research takes what Holmes (1991) calls a ‘problem approach’ to areas where problems are evident, so that the mechanisms and structures of the education and training systems can be better compared and, hence, better understood. In this context, it would also be helpful, for example, to combine research into transitions with country-specific research focusing on what some observers now call the ‘precariat’. Notes 1. The highly marked insider-outsider problem besetting the Japanese labour market makes it impossible to separate the two phenomena from the perspective of a comparative transition approach because it is difficult to gain a long-term perspective on the consequences for the pathways followed by individuals in these groups (for a more detailed discussion, see below and also OECD [2009, 59] and Inui, Sano, and Hiratsuka [2007]). For example, unlike countries with liberal labour markets, such as the English-speaking countries, the unemployed in older age groups find straightforward access to the labour market impossible. In Japan, if you have not secured permanent employment by the time you are around 35, you are almost guaranteed to remain excluded from it. This also, of course, applies to older freeters and NEETs. 2. The assumption that as the average educational level rises in younger cohorts, the numbers in both groups will fall, is not borne out by empirical evidence. It can be posited that, in particular, labour market conditions have offset the trend towards higher qualifications and that, as a result of ‘creaming off processes’, young people who have missed out on education and training have been left even further behind in terms of employment prospects. 3. There has been a long-term shift here. Until the 1990s, Japan’s labour market situation was markedly better (see hypothesis three) and the country had a substantially higher proportion of ‘dream-pursuing’ freeters. For freeters, then, at least one justification for their situation had disappeared. While it was possible for individuals to live their lives in accordance with their own values until the late 1990s, they are now influenced much more by the difficult labour market situation (Honda 2006).

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