Restrictive labor practices often reflect a society’s fear of the disruptions caused by job losses. Do Japan’s fears go even deeper? An unusual link between male suicide rates and unemployment suggests that Japan exhibits a cultural psychology that makes job losses a particularly heavy burden.

From 1953 to 2003, each 1 percentage point increase in the cyclical component of the male unemployment rate led to a 5.39 percentage point increase in the cyclical component of the male suicide rate. This effect is 38 times larger for Japan than for the United States. The link holds for women in Japan, although it is much weaker, at 1.38 percentage point. There is no significant relationship between female suicide and unemployment rates in the United States.

The strong link between unemployment and suicide probably reflects two aspects of Japanese society. First, the Japanese are more likely to interpret losing a job as a personal failure, rather than the normal working of the economic system. Second, they may be more pessimistic about finding new employment in an economy that doesn’t feature robust job creation.

Source:  Excerpted from Miracle to Malaise: What’s Next for Japan?   W. Michael Cox and Jahyeong Koo, Economic Letter, Federal Reserve Bank of Dallas, V 1, No. 1 January 2006 [cited in http://economistsview.typepad.com/economistsview/2006/01/the_economic_an.html, but now the link is broken.]