This paper explains the secular increase of nonstandard workers in Japan, whose share of employment increased from 17 to 34% between 1986 and 2008. Changes in labor force and industrial compositions account for one quarter of the increase of nonstandard workers. Product‐demand fluctuation and the introduction of information and communication technologies increased firms' usage of nonstandard workers, but its quantitative effects are limited. The increase of nonstandard workers was concentrated among new entrants to the labor market, male workers of younger cohorts, and female workers of all cohorts, suggesting that the declining importance of the long‐term employment relationship is a major cause for the increase of nonstandard workers.