• Employment and Wage Adjustments at Firms under Distress in Japan: An Analysis Based upon a Survey
  Kenn ArigaRyo Kambayashi

  Abstract

  We use the result from a survey of Japanese firms in manufacturing and service to investigate the choice of wage and employment adjustments when they needed to reduce substantially the total labor cost. Our regression analysis indicates that the large size reduction favors the layoffs of the core employees, whereas the base wage cuts are more likely if the firms do not feel immediate pressures from the external labor market or the strong competition in the product market. We also find some evidence that the concerns over adverse selection or demoralizing effects of wage cuts are real. Firms do try to avoid using base wage cuts if they consider these factors more important.

  Introduction

  The decade long stagnation of the economy left visible and perhaps also invisible scars in many facets of the Japanese economy. During the decade of the stagnation (take,1992-2001, for example, as the decade), the economy lost 3.5million regular and full time jobs. Although the precise breakdown is not readily available, the severity of the recession is shown in the proportion of the job loss due to outright layoffs, rather than those by not replacing retiring employees. Figure 1 can be used to compare the lost decade with past recessions. The share of layoffs was indeed large during the period. Still it is comparable to the figure in the recession after the first oil shock.

  2009.05

  PDF File

• Wage – Employment Adjustment and Price Setting Behavior (in Japanese)
  Kenn ArigaRyo Kambayashi

  Abstract

  Using a survey of Japanese firms, this paper empirically examines interactions among employment, wage and price adjustments at firm level. Our major findings are as follows. (1) The firms in the survey generally view moral hazards as the most important factor preventing downward wage adjustments, a perception shared by German firms in a similar survey. Based upon questions on episodes of large negative shocks on labor demand, our findings are： (2) they tended to reduce their employment, not wages, if they viewed that they would lose more productive workers when they lower wages; and (3) those firms facing more competitive product markets tended to use employment, rather than wage, adjustments.

  Introduction

  1990 年代の日本の労働市場は、国内的には硬直的な労働市場の結果として解釈されることが多い。すなわち、過度に保護され雇用も賃金も保証された正規社員の調整が進まず、その歪みが就業者の非正規化や失業率の急上昇に現れているとする議論が典型例である。これらの議論に対する賛否は分かれるが、注意すべき点は、構造改革の時代ともいうべき 1990 年代において、労働市場を巡る議論が他の市場や企業･消費者行動と切り離されて観念されてきた点であろう。

  2008.09

  PDF File

• On the Efficiency Costs of De-tracking Secondary Schools
  Giorgio BrunelloKenn ArigaLorenzo RoccoRoki Iwahashi

  Abstract

  During the postwar period, many countries have de-tracked their secondary schools, based on the view that early tracking was unfair. What are the e¢ ciency costs, if any, of de-tracking schools? To answer this question, we develop a two skills - two jobs model with a frictional labour market, where new school graduates need to actively search for their best match. We compute optimal tracking length and the output gain/loss associated to the gap between actual and optimal tracking length. Using a sample of 18 countries, we find that: a) actual tracking length is often longer than optimal, which might call for some e¢ cient de-tracking; b) the output loss of having a tracking length longer or shorter than optimal is sizeable, and close to 2 percent of total net output.

  Introduction

  In most education systems in the developed world, heterogeneous pupils are initially mixed in comprehensive schools - typically primary and lower secondary education. As some stage of the curriculum, however, some form of (self) selection takes place, typically based on ability and past performance, and students are allocated to schools which specialize in different curricula (tracks) or to classes where subjects are taught at a different level of di¢ culty (streams). The former system is typical of Central European countries, such as Germany, Austria, The Netherlands and Hungary, but exists also in Korea and Japan, and the latter system is typically observed in the US. When no selection whatsoever occurs during upper secondary school, as in some Scandinavian countries, choice and specialization are delayed until college education.

  2007.01

  PDF File