To Fire or to Hoard? Explaining Japanâ€™s Labor Market Response in the Great Recession
AbstractThe Great Recession pushed Japanâ€™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 Japanâ€™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-Ã -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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