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Economic Effects of the Front-Loaded Reform Program

November 9, 2001

Cabinet Office

Government of Japan

1. Effects of Employment Measures

     The measurable effects from implementing the employment measures listed in chapter 2 on strengthening safety nets are as follows.

1) Employment Creation

     About one million jobs will be created over three years:

  • by new types of public services -- slightly over 500,000
  • by supporting employers in newly growing areas -- about 170,000
  • by supporting reemployment -- about 190,000
  • by utilizing internship for younger generation, and others -- (remaining)

2) Job Training and Capacity Building

     About 80,000 opportunities will be newly provided for displaced workers toward the end of FY2001.

2. Effects on Total Economy

     Positive effects on GDP are expected through the acceleration of structural reforms such as institutional reforms, business environment development, and measures for small- and medium-sized companies. They are aimed toward vitalizing the economy, creating new industries and employment, and encouraging challengers.

     With regard to government investment for social infrastructures listed in the Front-Loaded Reform Program and disaster relief measures, GDP is estimated to be pushed by approximately 0.1 percent in real terms and 0.2 percent in nominal terms over the period of one year.

Note

  1. Additional government investment amounts to around 0.6 trillion yen, including disaster relief measures (0.3 trillion yen by the central government).
  2. The above calculation is based on multipliers derived from the Short-run Macroeconometric Model of the Japanese Economy of the Economic and Social Research Institute, Cabinet Office, October 2001.  They are 1.09 in real terms and 1.50 in nominal
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