Wage Determination and Distribution in Japan


In the wake of its wartime destruction, Japan experienced a period of strong industrialization in the 1950s and 1960s, reaching an exceptionally high level of per-capita GNP or per-capita income. After the two oil crises, the growth rate of the economy declined, and it has since stabilized. During this stable period, Japan's macroeconomic performance, in particular the level of unemployment, has been considerably better than that of other industrialized countries. This economic performance can provide us with valuable information on the role of wages and of the labor market. In this book, Professor Tachibanaki investigates the empirical and theoretical issues of wage determination and wage differentials in Japan since the War, concentrating on recent developments. He also examines the relationship between the role of wages and such features of the labor market as employment and unemployment. Japan's institutional singularities - including what the OECD called the `Three Sacred Treasures of the Imperial Houses': nenko-joretsu (seniority system), life-long employment, and enterprise unionism - are investigated on both efficiency and equity grounds. The Japanese authorities collect a great variety of macroeconomic data, including data relating to the labor market which is categorized according to a large number of demographic variables and firm characteristics. Professor Tachibanaki reports and analyses the data that is publicly available, including the Ministry of Labor's annual Wage Structure Survey of over one million employees, enriching it with its own research observations. An introduction to the main characteristics of the labor market, industrial relations system, and wage in Japan, explaining the degree of difference from Europe and the USA, establishes a framework for labor economists relatively new to the study of Japan. Detailed explanations of wage determination according to sex, age, education, experience, occupation, size of firm, and performance takes the reader beyond stylized assumptions about average behavior in Japan.

Additional information

Publisher: Place of publication:
  • Oxford, England
Publication year:
  • 1996


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