Transition from School to Work in Japan

Using retrospective data of young people's work experience in Japan, this paper found that initial labor market conditions, i.e., when workers first enter the labor market after permanently leaving school, have a significant lasting impact on the employment experiences of workers in their teens and twenties. An increase in the unemployment rate at the time of labor market entry reduces the probability of gaining full-time regular employment and, more important, increases the future probability of workers of leaving employers by lowering the quality of job matches. It was also found that the vocational guidance or recommendations workers received at school could be effective in raising the quality of job matches. The adverse effect of initial unemployment rates on employment opportunities was most profoundly observed among female college graduates. J. Japan. Int. Econ., December 2001, 15(4), pp. 465–488. Faculty of Economics, Gakushuin University, 1-5-1 Mejiro Toshima-ku, Tokyo 171-8588, Japan; and Faculty of Economics, Meiji Gakuin University, 1-2-37 Shirokane-dai Minato-ku, Tokyo 108-8636, Japan. © 2001 Elsevier Science (USA).Journal of Economic Literature Classification Numbers: J24, J63, J64.     

Fluctuations in Unemployment and Industry Labor Markets

Throughout the 1990s, and particularly in the mid- to late-1990s, the Japanese employment situation went from bad to worse. We investigate the causes of rising unemployment in Japan, using data on individual workers from the “Special Survey of the Labor Force” between 1988 and 1999. This research focuses on the effect of labor market segmentation by industry on labor flows. Our findings reveal that unemployment in the construction industry and, more recently, in the service industry has contributed greatly to the national unemployment rate. We also find that most successful job transfers occur within the same industry, even though workers may experience some periods of unemployment. Finally, our results show that labor market conditions in each industry affect the probability that a worker will fall into unemployment as well as the probability that an unemployed worker will find new employment. These findings suggest that the Japanese labor market is segmented by industry and this segmentation contributed to the worsening unemployment in Japan. J. Japan. Int. Econ., December 2001, 15(4), pp. 437–464. Department of Economics, Dokkyo University, 1-1 Gakuen-cho, Soka-shi, Saitama 340-0042, Japan; Graduate School of Economics, Nagoya University, Furo-cho, Chikusa-ku, Nagoya, 464-8601, Japan. © 2001 Elsevier Science (USA).Journal of Economic Literature Classification Numbers: J63, J64.     

The End of Lifetime Employment in Japan?: Evidence from National Surveys and Field Research

Using both quantitative data from national surveys and qualitative data from our recent field research, this paper provides evidence on the recent transformation of Japan's celebrated practice of lifetime employment (or implicit long-term employment contracts for the regular workforce). Overall, contrary to the popular rhetoric of the end of lifetime employment, evidence points to the enduring nature of this practice in Japan. Specifically, we find little evidence for any major decline in the job retention rates of Japanese employees from the period prior to the burst of the bubble economy in the late 1980s to the post-bubble period. In general, our field research corroborates the main finding from the job retention rates by describing vividly that large firms in Japan have been trying to accomplish their restructuring and downsizing targets by relying heavily on transfers of their employees to their subsidiaries and related firms and hiring cuts, thus avoiding layoffs. Last, the burden of downsizing appears to fall disproportionately on young workers and middle-age workers with shorter tenure. J. Japan. Int. Econ., December 2001, 15(4), pp. 489–514. Department of Economics, Colgate University, Hamilton, New York 13346; Center on Japanese Economy and Business, Columbia Business School, New York; and TCER. © 2001 Elsevier Science (USA).Journal of Economic Literature Classification Numbers: J63, J64, J41, O53.     

International mixed duopoly and strategic commitments

This paper examines an international mixed model in which a social-welfare-maximizing domestic public firm competes against a profit-maximizing foreign private firm. First, the public firm can adopt either a lifetime employment contract or a wage-rise contract as strategic commitments. Second, the foreign private firm decides whether or not to enter the market. Third, if the foreign private firm enters, each firm independently chooses its actual output, while if the foreign private firm does not enter, the public firm acts as a monopolist. The paper shows the equilibrium of the international mixed model.

U.S. Distribution Entry Strategy of Japanese Manufacturing Firms: The Role of Keiretsu

This article identifies the determinants of three modes of foreign market entry into distribution activities—arm's-length contracts, joint ventures, and wholly owned subsidiaries—and assesses the impact of unique institutional structures on the decision. We examine 310 Japanese manufacturers' entries into the U.S. market and find evidence that keirestu affiliation significantly increases the likelihood that contracts are chosen, suggesting common keiretsu membership by manufacturers and general trading companies mitigates agency problems in contractual delegation of foreign distribution activities. Regading the choice between joint ventures and wholly owned subsidiaries, relaxed capital and information constraints increase the likelihood that keiretsu firms establish wholly owned subsidiaries. J. Japan. Int. Econ., March 2000, 14(1), pp. 43–72. Anderson Graduate School of Management, University of California, 110 Westwood Plaza, Los Angeles, California 90095-1481; A. T. Kearney, 222 West Adams, Chicago, Illinois 60606 Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: E23, L22, L14.     

Fixed-Term Contracts and Labor Market Duality in France

The French labor market is segmented between permanent and temporary workers. The second category has difficulty in getting an open-ended contract. This paper aims at depicting workers on short-term contracts and shows the consequences on their professional career are negative and significant. A large part of the wage gap between permanent and temporary workers remains unexplained by observable characteristics. They receive less on-the-job training and their likelihood of obtaining a stable job is lower than 30% after 1 year and a half. They have also a higher probability of being the adjustment variable in case of an economic negative shock. These different findings show the importance of using public policies to encourage transitions from fixed-term to permanent employment and reducing labor-market duality.     

Unemployment and Labor Market Institutions: An Empirical Analysis

The development of the unemployment rate differs substantially between OECD countries. In this paper we investigate to what extent these differences are related to labor market institutions. In our analysis we use data of eighteen OECD countries over the period 1960–1994 and show that the way in which institutions interact is important. J. Japan. Int. Econ., December 2001, 15(4), pp. 403–418. Department of Economics, CentER, Tilburg University and Institute for Labour Studies (OSA), The Netherlands. © 2001 Elsevier Science (USA).Journal of Economic Literature Classification Numbers: E24, J68.     

Financing consumption in an aging Japan: The role of foreign capital inflows and immigration

We project the impact of demographic change on Japanese capital flows by simulating the impact of population aging on Japanese saving and investment rates. As aging depresses saving rates, in our baseline projections, we show that by 2015, foreign capital inflows will comprise about 15 percent of Japanese output. A distinguishing feature of this paper is that we compare the capital flows that occur without immigration to the capital inflows that would occur with immigration of 400,000 people annually. With the larger labor force from immigration and the large induced capital accumulation, output will be 22 percent higher by 2020, and 50 percent higher by 2040. The higher output means that less capital needs to be imported; by 2015, Japan will be importing only 8 percent of its output. J. Japanese Int. Economies 18 (4) (2004) 506–527.     

Employee Attitudes,Earnings and Fixed-Term Contracts: International Evidence

We explore the relationship between employee attitudes, earnings and fixed-term contracts using data from the British Social Attitudes Survey and International Social Survey Programme. We find that workers employed under such contracts receive significantly lower earnings than their permanent contract counterparts, even after controlling for a plethora of personal and job characteristics. This may be indicative of wage discrimination against fixed-term contract employees. Our results also allude to possible asymmetries in the role of education across this two-tier system, with educational attainment playing a more prominent signaling role in the case of ‘permanent’ contract employees. We also find significant evidence of attitudinal effects, with workers employed on permanent contracts more likely to be both satisfied and secure with their job, but also more likely to find work stressful and exhausting and, perhaps as a consequence, to engage in absence. JEL no. J24, J31, J33     

The differences in the economic effects between the DB plan and the DC plan

This paper investigates the differences between the defined benefit plans (DB) and the defined contribution plans (DC) in the enterprise pension programs in Japan. Attention is paid not only to the effect of labor turnover but also to the difference in various categories of workers, which are classified by gender, education, timing of labor turnover, etc. Also, we take into consideration the effect of interest rates. One important conclusion of this paper is that the DC plan is superior to the DB plan, in contrast to the common belief. J. Japanese Int. Economies 18 (4) (2004) 551–564.     

Information technology and the Japanese economy

In this paper we compare sources of economic growth in Japan and the United States from 1975 through 2003, focusing on the role of information technology (IT). We have adjusted Japanese data to conform to US definitions in order to provide a rigorous comparison between the two economies. The adjusted data show that the share of the Japanese gross domestic product devoted to investment in computers, telecommunications equipment, and software rose sharply after 1995. The contribution of total factor productivity growth from the IT sector in Japan also increased, while the contributions of labor input and productivity growth from the non-IT sector lagged far behind the United States. Our projection of potential economic growth in Japan from for the next decade is substantially below that in the United States, mainly due to slower growth of labor input. Our projections of labor productivity growth in the two economies are much more similar. J. Japanese Int. Economies 19 (4) (2005) 460–481.     

Competition in the Pay-TV Market

This paper discusses competition in the emerging pay-TV market. Economic features of the industry are described, and the current state of the market in the UK is summarized. Two simple formal models of the industry are analyzed: First the danger of two vertically integrated pay-TV networks entering into collusive agreements to exchange programming with each other is discussed; second, the private and social incentives for signing exclusive contracts for premium programming are analyzed. J. Japan. Int. Econ., December 1999, 13(4), pp. 257–280. Nuffield College, Oxford OX1 1NF, United Kingdom. Copyright 1999 Academic Press.Journal of Economic Literature Classification Numbers: D43, L13, L41, L82.     

On the determinants of bonuses and basic wages in large Japanese firms

The profit-sharing model has attracted considerable attention as a hypothesis to explain wage flexibility and employment stability in Japan. This paper presents an alternative explanation of how bonuses and basic wages are determined in Japan, based on the efficiency wage hypothesis. In particular, we focus on the aspect that bonuses are paid to compensate employees for the intensity of work experienced during the last period, and basic wages are affected mainly by labor market conditions and are not firm-specific. We compare the two models, testing them for both industry aggregate data and firm microdata.     

Monetary Policy, Credit, and Real Activity: Evidence from the Balance Sheet of Japanese Firms

We analyze the mechanism of monetary transmission in the Japanese economy by using the quarterly time series data disaggregated by firm size. In particular we examine the channels through which monetary policy influences the firm's fixed investment with special focus on the firm's land. We estimate the vector autoregressive model where we encompass two competing hypotheses on the monetary transmission: monetary and credit channels. Our evidence is in support of the credit channel. We find that land has played a vital role in the monetary transmission, especially for small firms. Moreover, we find that fall of land value in 1990s weakened the efficacy of monetary policy considerably. J. Japan. Int. Econ., December 2000, 14(4), pp. 385–407. Institute of Social and Economic Research, Osaka University, Osaka, Japan Copyright 2000 Academic Press.Journal of Economic Literature Classification Numbers: E22, E32, E44, E51.     

Determinants of Individual-Firm Markup in Japan: Market Concentration, Market Share, and FTC Regulations

This paper estimates individual firm level markup for more than 400 major manufacturing firms in Japan. Our estimates suggest the presence of significant market power for most of these firms, due not only to market concentration but also to the firms' own market shares, as well as advertizing and sales promotion efforts. The paper then goes on to assess systematically the impact on estimated markups of regulatory measures taken by the Fair Trade Commission (FTC) of the Japanese Government. We find that non-punitive FTC activities are directed toward the right targets and are reasonably effective, whereas injunctions, the strongest measure endowed to the FTC, has essentially no effect on the markups of firms in our sample. J. Japan. Int. Econ., Dec. 1999, 13(4), pp. 424–450. Institute of Economic Research, Kyoto University, Yoshida-Honmachi, Sakyo-ku, Kyoto 606-8501, Japan; Institute for Social and Economic Research, Osaka University; and Faculty of Economics, University of Tokyo. Copyright 1999 Academic Press.Journal of Economic Literature Classification Numbers: L13, L41.     

关于就业协议适用劳动合同法的几点思考

自《劳动合同法》实施以来,由于就业协议与劳动合同的冲突使得毕业生的劳动权益受到很大的损害,其根本原因在于就业协议与劳动合同性质不同、内容有别,导致适用法律的不同。因此,改革就业协议就成了摆在我们面前一个必须解决的问题,但如何改革却并没有形成共识。笔者认为改革就业协议,最好的办法就是创造条件使就业协议适用劳动合同法。本文在全面分析就业协议存在的必要性及面临的主要问题、就业协议适用劳动合同法的必要性和可行性的基础上,提出了改革就业协议的具体建议。     

我国经济发展水平与劳动力就业数量关系研究——兼论我国劳动力资源是否过剩

我国劳动力对经济发展而言，其生产率高于资本，因而经济发展对劳动力就业的促进作用逐渐减弱（经济增长的就业弹性逐渐变小）。据测算，我国2013年以前劳动力就业压力很大，2015年以后劳动力又会供不应求。所以，我国未来经济发展中，2014年前后应采用不同的产业结构调整策略来充分满足劳动力就业的要求。     

The Japanese Labor Markets: Unemployment and Vacancies

We employ a disequilibrium model to examine the disequilibrium and structural causes of unemployment and vacancies in Japanese labor markets on the basis of business survey data. The Keynesian is a primary determinant of unemployment and the underconsumption of vacancies in most subperiods for both large and small firms. The degree of mismatch in the labor markets for large firms is lower than that for small ones. It exhibits a decreasing trend until the beginning of the eighties, then reverses to an increasing one around the mid-eighties. This paper contributes to issues such as recently conspicuous structural causes, transfer of employees, and dual structure through an alternative approach to the conventional methods. J. Japan. Int. Econ. June 1999, 13(2), pp. 91–118. Faculty of Economics, Tohoku University, Sendai 980-8576, Japan; and Faculty of Economics, Niigata University, Niigata 950-21, Japan. Copyright 1999 Academic Press.Journal of Economic Literature Classification Numbers: D58, J60, C40.     

Do Exporting Firms Pay Higher Wages? Evidence from Kenya's Manufacturing Sector

Abstract: When trade liberalization was first embarked on in Kenya some 20 years ago, a key argument against it was that it would reduce domestic wages, as exporting firms sought to remain competitive versus, for example, the low‐cost Asian countries. A counter argument was that manufactured exports require more elaborate design, supervision, packaging and handling, and thus a more educated labor force than production for the domestic market. To attract such skills, exporting firms would need to pay higher wages than non‐exporting ones. This paper uses data from Kenyan manufacturing to study the impact of trade liberalization on earnings, distinguishing between exporting and non‐exporting firms. In particular, it investigates whether exporting firms paid a wage‐premium to their employees. The study uses manufacturing firm survey data from a World Bank regional project. The study has three important findings: (1) There was a large and significant effect of exporting on wages in the first decade of trade liberalization. During the first half of the 1990s, workers in exporting firms earned up to 30 percent more than those engaged in non‐exporting firms. The results are robust even after controlling for individual and firm‐level characteristics such as employee demographics, productivity, firm location and occupation. (2) After a decade of trade liberalization, exporting ceased to be a significant determinant of wages in Kenyan manufacturing, after controlling for productivity and firm location. (3) During the 2000s, casual or irregular employment became a more common feature of exporting firms. The results suggest that while higher wages were important in attracting skilled labor to exporting firms at the beginning of trade liberalization in the 1990s, domestic competition has since reduced the wage premium. Cost cutting pressures are instead reflected in the substitution of casual and low wage labor for permanent and better educated labor and in increased automation.     

Fraud Firms' Non-Implicated CFOs: An Investigation of Reputational Contagion and Subsequent Employment Outcomes*

We investigate labor market consequences for CFOs employed by fraud firms, focusing on reputational contagion for those who are not implicated. These individuals provide an opportunity to understand reputational contagion and the nuanced meaning of “guilt” because the labor market may suspect complicity or infer negligence regardless of whether that is truly the case. We compare these CFOs to a matched sample of non-fraud CFOs and track both turnover and subsequent employment positions. Non-implicated CFOs are more likely to experience turnover compared to non-fraud CFOs, driven in particular by the public revelation of fraud to the labor market. We further find that non-implicated CFOs are more likely to obtain comparable subsequent employment than non-fraud CFOs before the fraud is publicly revealed, but not after. In supplementary analyses, we find that turnover rates are highest for non-implicated CFOs who started their employment with the firm before the fraud began as compared to non-implicated CFOs who started their employment after the fraud began. These results highlight the labor market significance of the public revelation of fraud and imply that the labor market does not fully distinguish between fraud firm association and general firm performance when making executive hiring decisions.