EIJS Working Papers Series
Japanese Labor Market Reform. Why Is It So Difficult?
Abstract: Socially embedded features in Japanese markets and how
market activities in Japan deviate from the West have attracted
considerable attention from a wide range of scholars in the social
sciences. But the period of economic stagnation following the burst of the
bubble economy in 1990 has brought about a deluge of criticism and reform
pressures focusing on restructuring, sometimes taken to be synonymous with
the dismantling of the very same institutions that were once viewed as the
pillars of Japanís postwar economic expansion. Amidst the economic
downturn, the benefits of social exchange in Japan are overshadowed by its
costs, and there is mounting pressure that transactions must become more
market driven. This paper examines how embedded features in the Japanese
labor market impede the efficient mobility and allocation of workers. The
gains from economic exchange may be many, and numerous economists and
policy makers have proposed measures that facilitate the dismissal of
workers to set the stage for a more fluid labor market. But a market that
matured under the tradition of long-term employment governed by the norms
of social exchange has yet to develop an infrastructure for job-seekers,
and there remain numerous barriers that prevent the mobility of workers
across different organizations.
Keywords: Social exchange; economic exchange; embeddedness; labor mobility; public policy; (follow links to similar papers)
JEL-Codes: A14; J60; J68; Z13; (follow links to similar papers)
12 pages, April 1, 2002
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