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Choice of Technology and Labour Market Consequences: An Explanation of U.S.-Japanese Differences

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  • Morita, Hodaka

Abstract

This paper provides an explanation for U.S.-Japanese differences concerning continuous process improvement, turnover rate, and the level and firm-specificity of human capital accumulation. Connection between continuous process improvement and the firm-specificity of training causes multiplicity of equilibria. In the Japanese equilibrium, each firm conducts continuous process improvement because other firms do so, and as a consequence training provided by such a firm becomes less effective in other firms. This lowers the turnover rate, which, in turn, increases firms' incentives to train employees. In the US equilibrium, training is general, which raises the turnover rate and decreases incentives to train.

Suggested Citation

  • Morita, Hodaka, 2001. "Choice of Technology and Labour Market Consequences: An Explanation of U.S.-Japanese Differences," Economic Journal, Royal Economic Society, vol. 111(468), pages 29-50, January.
  • Handle: RePEc:ecj:econjl:v:111:y:2001:i:468:p:29-50
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    Cited by:

    1. Kambayashi, Ryo & Kato, Takao, 2012. "Good Jobs, Bad Jobs, and the Great Recession: Lessons from Japan's Lost Decade," IZA Discussion Papers 6666, Institute for the Study of Labor (IZA).
    2. Yijiang Wang, "undated". "Product Market Conditions and Job Design," Working Papers 0402, Human Resources and Labor Studies, University of Minnesota (Twin Cities Campus).
    3. Kato, Takao & Owan, Hideo, 2011. "Market characteristics, intra-firm coordination, and the choice of human resource management systems: Theory and evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 375-396.
    4. Ishida, Junichiro, 2005. "Lifetime employment as a coordination failure," Japan and the World Economy, Elsevier, vol. 17(2), pages 209-222, April.
    5. DeVaro, Jed & Farnham, Martin, 2011. "Two perspectives on multiskilling and product-market volatility," Labour Economics, Elsevier, vol. 18(6), pages 862-871.
    6. Tsuru, Tsuyoshi & Nakajima, Kentaro, 2012. "Product Architecture and Human Resource Management: Comparing Japanese, Chinese, and Korean Firms Based on a Questionnaire Survey," Discussion Paper Series 563, Institute of Economic Research, Hitotsubashi University.
    7. Michael Waldman, 2012. "Theory and Evidence in Internal Labor Markets," Introductory Chapters,in: Robert Gibbons & John Roberts (ed.), The Handbook of Organizational Economics Princeton University Press.
    8. Ishida, Junichiro, 2004. "Signaling and strategically delayed promotion," Labour Economics, Elsevier, vol. 11(6), pages 687-700, December.
    9. Storz, Cornelia & Riboldazzi, Federico & John, Moritz, 2015. "Mobility and innovation: A cross-country comparison in the video games industry," Research Policy, Elsevier, vol. 44(1), pages 121-137.
    10. KATO Takao & KODAMA Naomi, 2016. "Corporate Social Responsibility and Gender Diversity in the Workplace: Evidence from Japan," Discussion papers 16063, Research Institute of Economy, Trade and Industry (RIETI).
    11. Hodaka Morita, 2005. "Multi-skilling, Delegation and Continuous Process Improvement: A Comparative Analysis of US-Japanese Work Organizations," Economica, London School of Economics and Political Science, vol. 72(285), pages 69-93, February.
    12. Hideo Owan, 2004. "Promotion, Turnover, Earnings, and Firm-Sponsored Training," Journal of Labor Economics, University of Chicago Press, vol. 22(4), pages 955-978, October.

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