To Fire or to Hoard? Explaining Japanâ€™s Labor Market Response in the Great Recession
AbstractThe Great Recession pushed Japan’s unemployment rate to historic highs, but the increase has been small by international standards and small relative to the large output shock. This paper explores Japan’s cyclical labor market response to the global financial crisis. Our findings suggest that: (i) employment responsiveness has been historically low but rising over time with the increasing importance of the non-regular workforce; (ii) the labor market response was consistent with historical patterns once we control for the size of the output shock; and (iii) the comparatively lower employment response vis-à-vis other countries can in part be explained by the quick implementation of an employment subsidy program, a more flexible wage system, and a corporate governance structure that places workers rights above shareholders.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 11/15.
Date of creation: 01 Jan 2011
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-BEC-2011-02-26 (Business Economics)
- NEP-LAB-2011-02-26 (Labour Economics)
- NEP-MAC-2011-02-26 (Macroeconomics)
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