Subsidy competition and imperfect labor markets

This study presents a two‐country model of subsidy competition for manufacturing firms under labor market imperfections. Because subsidies affect the distribution of firms, subsidies influence unemployment rates and welfare in both countries. We show that when labor market frictions are high, subsidy competition is beneficial, although subsidies under subsidy competition are inefficiently high. In the coordinated equilibrium, the supranational authority provides a subsidy to firms that equal the expected total search costs, which increases the number of firms relative to laissez‐faire and improves welfare relative to laissez‐faire and subsidy competition. Finally, we find that a rise in a country's labor market frictions raises the equilibrium subsidy rate, affects unemployment rates, and lowers welfare.     

Regional patterns of employment changes of less-educated men in Japan: 1990–2007

We investigate regional patterns in employment of less-educated men in Japan from 1990 to 2007. The employment–population ratio of junior high school graduate men (9 years of compulsory schooling) decreased from 1990 to 2007. Wage growth across regions had a unique pattern during this period: it was high in the low-wage regions in the 1990s but high in the high-wage regions in the 2000s. We use these regional variations in wage growth to identify the labor supply elasticity of less-educated men. The estimated elasticity of the employment-to-population ratio of junior high school graduate men is around 0.15.     

A Comparison of Wage Structures in the United States and Japan: Results from Cell Mean Regressions

This paper discusses three issues in estimating wage regressions by using the aggregated data from the Japanese Basic Survey of Wage Structure (BSWS). The issues include: (1) the order of taking averages and logs, (2) the usage of differently aggregated tables in the BSWS, (3) the treatment of the bonus variable for workers who have just joined a firm. To address them, I present regression results from the US Current Population Survey (CPS). I find that using differently aggregated tables sometimes affects the estimates significantly. I also present the results from wage regressions from the differently aggregated BSWS data.
JEL Classification Number: J30.     

A cohort analysis of male labor supply in Japan

This study uses repeated cross-sectional data from 1982 to 2007 to understand labor force behavior of men in Japan, focusing on the increase in non-regular employment. I find that regular employment fell significantly for recent cohorts of less-educated men. Regular employment of single men and less-educated married men responded more to the business cycle than did regular employment of highly educated married men. Cohorts who finished their schooling in the late 1990s and early 2000s experienced a severe decline in regular employment at young ages, although this phenomenon was mainly observed among single men and not among married men.     

Equal Employment Opportunity Law and the gender wage gap in Japan: A cohort analysis

In this article, I perform a cohort-based analysis of the female-to-male wage gap using aggregate data in Japan from 1975 to 2005. While the inter-cohort closing in the gender wage gap is apparent, the convergence is smaller when the gap is calculated for each level of education. This pattern suggests that a certain portion of the gender wage convergence is due to changes in the educational composition of the workforce. I find that educational composition changes played a larger role in closing the pay gap for younger cohorts than it did for older cohorts. Highly educated women who entered the labor market after the enactment of the Equal Employment Opportunity Law gained in that they had more regular full-time employment but did not experience wage gains relative to their male counterparts.     

The effectiveness of financial incentives in controlling the health care expenditures of seniors

This paper examines whether financial incentives imposed on health insurers are effective or not in containing the health care expenditures of seniors. Under the Japanese health care system, the degree of financial incentives to restrain the health care expenditures of seniors varied significantly among almost 5300 insurers. The extent to which the strength of financial incentives is related to the actual health care expenditures is analyzed. The results indicate that financial incentives do not appear to restrain expenditures significantly.     

Measuring economic localization: Evidence from Japanese firm-level data

This paper examines location patterns of Japan’s manufacturing industries using a unique firm-level dataset on the geographic location of firms. Following the point-pattern approach proposed by Duranton and Overman (2005), we find the following. First, about half of Japan’s manufacturing industries can be classified as localized and the number of localized industries is largest for a distance level of 40 km or less. Second, several industries in the textile mill products sector are among the most localized, which is similar to findings for the UK, suggesting that there exist common factors across countries determining the concentration of industrial activities. Third, the distribution of distances between entrant (exiting) firms and remaining firms is, in most industries, not significantly different from a random distribution. These results suggest that most industries in Japan neither become more localized nor more dispersed over time and are in line with similar findings by Duranton and Overman (2008) for the UK. Fourth, a comparison with the service sector indicates that the share of localized industries is higher in manufacturing than in services, although the extent of localization among the most localized manufacturing industries is smaller than that among the most localized service industries, including financial service industries.