Japan has one of the lowest shares of foreign-born population in the OECD, 2.2% in 2021 compared with 10.4% in the OECD. Approximately half of all immigrants living in Japan are in the country for work or study purposes. Among these, half are high skilled labour migrants and their families; one‑quarter are trainees, who stay in the country for up to 5 years through Japan’s Technical Intern Training Programme; and one‑quarter are international students.
In the late 2010s, the number of labour migrants, trainees and international students increased sharply. The growing inflow stopped during the COVID‑19 pandemic due to the mobility restrictions, but resumed in 2022 and 2023. While almost all labour migrants and international students in Japan come from within Asia, the countries of origin have changed recently. The number of migrants from China, the main country of origin, has decreased whereas the number of migrants from other countries, such as Viet Nam or Nepal, has increased.
Favourable conditions in the Japanese labour market explain a large part of the increase in labour migration. The unemployment rate has remained low for the past 15 years, and vacancies per applicant hit a 45 year high in fiscal year 2018. Moreover, to address the challenge of a rapidly ageing population, labour migration is now considered one of the policy options, together with long-standing efforts to increase productivity growth and the labour supply of domestic residents.
Labour migration to Japan is driven by Japanese employers, rather than by the government selecting candidates. All migrants, regardless of the programme, are required to hold a job offer from a Japanese employer. There is no labour market test or salary threshold beyond the prevailing wage. The migration process is fast, the processing fees are low, and the digitalisation of processes is improving.
Japan’s migration policy has historically focussed on accepting skilled migrants and attracting international students. Most skilled immigrants migrate to Japan under a single programme, Engineers/ Specialists in Humanities/ International Services, which encompasses a wide range of eligible occupations, such as engineers, architects or translators. Japan introduced a Points-Based System (PBS) offering better residency conditions to highly-skilled foreign professionals in 2012. The PBS has been primarily used by immigrants already in Japan.
Relative to other OECD countries, eligibility conditions for permanent residency in Japan are strict. Migrants usually need to live ten years in the country to be eligible, although the PBS grants faster access to permanence residency. The definition of accompanying family is also restrictive (excluding common-law partners and same sex partners) and the spouses of high skill labour migrants do not have immediate and unrestricted access to the labour market.
Attracting talent is also hindered by low job mobility in the Japanese labour market. Workers are often hired before completing their studies and there are high returns to job tenure, which makes integrating talent from abroad challenging. Moreover, integrating into Japanese society remains a challenge for migrants. Japan has only recently started developing an integration policy to support labour migrants. However, high-skilled migrants who choose to migrate to Japan tend to stay in the country long term.
International students are a key resource targeted by Japan’s strategy to attract and retain global talent. Most skilled labour migrants in Japan first entered the country as international students. Many international students start by attending a Japanese Language Institute in Japan before enrolling in higher education. Tertiary education is not the only pathway: in the past decade, the number of international students in Japanese vocational schools has increased more than that in universities. The retention rate of international students in Japan has increased in the last decade and is high in international comparison. Nevertheless, job hunting and integrating into the Japanese labour market remains challenging for international students.
For lower skilled occupations, Japan historically had no labour migration channels. The Technical Intern Training Programme (TITP), first created in the 1960s for skills development and transfer back to developing countries, expanded over time and became the main programme through which firms could employ low and medium skilled foreign workers. Trainees are primarily employed in manufacturing, construction and agriculture, and their stay in Japan is limited to five years at most. Given the programme’s training focus, mobility between employers is foreseen only in exceptional circumstances. Since restricted mobility creates a risk of exploitation, TITP was reformed in the late 2000s and in the mid‑2010s to improve oversight and protection. Trainees are expected to return to the country of origin, so family reunification is not allowed. A main challenge in oversight of the TITP is rent-seeking by brokers in sending countries, leading to indebtedness and vulnerability of trainees. Thanks to co‑operation with countries of origin, there has been some improvement in this area, but excessive fees in some countries of origin have not been entirely eliminated.
The Specified Skilled Worker Programme (SSWP) was introduced in 2019 to create a potentially long-term pathway for migrants with trades qualifications in specific sectors, including those most affected by demographic structural changes, such as nursing care. The programme has two tiers, with the second tier open to workers with a higher skill level and offering family reunification and a pathway to permanent residency. To enrol in the programme, candidates need to pass a skills test, in the country of origin or in Japan, or complete a TITP programme in the same sector. The TITP has so far been the main pathway to SSWP, highlighting the need for alignment between the two programmes. The possibility of family reunification for the higher-skill stream of SSWP, still under introduction, will also have implications for the labour market as spouses will also seek employment.
If the SSWP is to develop scale, Japan must also expand its ability to recruit adequately prepared workers directly from origin countries. Stakeholders in Japan – business associations, employers or public agencies – can follow the emerging model of “skills mobility partnerships”. This means investing in partner training institutions in origin countries to reinforce their capacity to provide candidates with the language and vocational skills to enter both the SSWP and the TITP and any potential successor. Training should also be relevant for job opportunities in the origin country so that the training is attractive to more candidates and contributes to the skills base of the origin country.
