Determinants of Understanding of Labor Laws: Evidence from Japanese University Students

Abstract This study investigates Japanese university students’ knowledge of labor laws using test theory and analyzes the determinants of understanding of labor laws. The college enrollment rate in recent years in Japan is over 50% of secondary education graduates, and as a result, college graduates are no longer considered elite employees. Rather, almost all graduates are merely ordinary workers. For that reason, students need to learn about their employment rights before obtaining initial employment to protect themselves and their future careers. However, there are few studies regarding Japanese university students’ knowledge of labor laws. This study, therefore, investigates their labor laws knowledge based on latent rank theory and analyzes the determinants by econometric analysis. Empirical results show that the average of correctly answered questions regarding Japanese labor laws is about 50%. I can view this record as not being positive because subjects start their job-hunting process with less than an ideal amount of legal knowledge. This research also confirms that there are positive correlations between some independent variables (for example, field of study, the number of credits regarding career education, experience with exploitive labor, and the number of friends who are older than a given subject) and the rank of labor law knowledge. This implies that education and experience regarding career development while enrolled in university correlates with better understanding of labor laws.