Internal Labour Markets in Japan

Cover......Page 1
Half-title......Page 3
Title......Page 5
Copyright......Page 6
Dedication......Page 7
Contents......Page 9
Figures......Page 10
Tables......Page 12
Preface......Page 15
Introduction......Page 19
Part I Features of Japan's internal labor markets......Page 29
Overview......Page 31
The model......Page 33
The choice of vacancies and promotions......Page 36
The allocation of firms to internal and occupational labor markets......Page 37
ILM firms......Page 40
Wage bargaining and returns from search for unemployed workers......Page 41
Labor market equilibrium......Page 42
Comparative statics......Page 45
Discussion and extensions......Page 47
Training externalities......Page 48
The complementarity between education and workplace training......Page 49
Inefficient bargaining......Page 50
Finite substitution between the two types of labor......Page 52
Overview......Page 53
A model of human capital accumulation......Page 56
The model......Page 58
Maximization of the lifetime net utility of each employee......Page 62
Career paths and investment policy......Page 64
Career paths and investment policies in ILM and OLM firms......Page 65
General equilibrium......Page 68
Market equilibrium with ILM and OLM firms......Page 70
Earnings profiles, seniority, talents, and jobs......Page 72
Experience, earnings profile, and promotions......Page 75
Proof of lemma 2.1......Page 78
The V functions......Page 79
Proof of lemma 2.2......Page 81
Proof of lemma 2.3......Page 82
Wage profiles......Page 84
Proof of lemma 2.5......Page 85
Review of the literature......Page 86
A measure of the degree of internalization......Page 89
Earnings profiles in internal and in occupational labor markets......Page 99
Summary......Page 110
Appendix List of the 92 occupations......Page 111
Overview......Page 114
Review of the literature......Page 115
The empirical relationship between earnings and seniority: Japanese data......Page 118
Earnings and seniority in Japan and the United Kingdom......Page 129
Summary......Page 138
Overview......Page 139
A brief review of the literature......Page 141
The firm......Page 145
The rank system......Page 146
Recruitment......Page 148
Promotion policy......Page 152
Exits......Page 164
Econometric analysis......Page 167
Firm growth and promotion policy......Page 173
Exits and promotion......Page 174
Recruitment methods and promotion policy......Page 175
Discussion......Page 176
Evidence from other firms......Page 177
Firm BGH......Page 181
Firm ABO......Page 183
Discussion......Page 184
Summary......Page 186
Overview......Page 187
Data and estimated markups......Page 189
Some inter-firm and industry comparisons......Page 190
External and internal labor markets......Page 191
Interactions with product market competition and firm performance......Page 194
Discussion......Page 199
Summary......Page 200
Appendix The estimation of the markups of prices over marginal costs......Page 201
Part II Recent changes in wage and employment structures......Page 205
Overview......Page 207
Adjustment of the mandatory retirement age......Page 208
Reforming hierarchies......Page 209
The bubble years and the aftermath......Page 212
The effects of ageing and of slower growth......Page 213
Institutional changes in the 1990s......Page 215
Multiple career tracks......Page 217
Accelerated retirement and age limits for managerial positions......Page 218
Restructuring compensation......Page 219
Summary......Page 220
Sony: introducing the company system......Page 222
Panasonic (Matsushita): front-loading severance pay......Page 223
Shin Nippon Steel: way behind, but moving......Page 224
Data and definitions......Page 225
Growth deceleration......Page 226
Changes in relative wages and spans of control......Page 228
Changes in promotion rates......Page 234
Appendix......Page 241
Previous literature......Page 244
Data......Page 245
Pooled cross-sections......Page 246
Cohort data, 1976–1996......Page 255
Summary......Page 257
Overview......Page 260
Setup......Page 261
Growth of the firm and the incentive structure......Page 262
Extension I: production efficiency and promotion......Page 265
Extension II: cohort effects......Page 268
Growth, relative wages, spans of control, and promotion rates......Page 269
Cohort effects......Page 272
Relative wages and business cycle fluctuations......Page 274
Descriptive analysis......Page 275
Summary......Page 280
Proof of lemma 10.1......Page 282
Derivations of the results in table 10.1......Page 283
Effects of an increase in alpha, beta or µ......Page 284
Temporary changes in quality and quantity of new recruits......Page 285
Epilog......Page 286
References......Page 289
Author Index......Page 299
Subject Index......Page 302