Japanese Lifetime Employment: A Century's Perspective
This paper examines the origins and dynamic evolution of the lifetime employment system in Japan from the beginning of the 20th century to present. Based on the historical perspective developed in the paper, we derive implications to the future course of the Japanese employment system. In this paper, we view lifetime employment as an economic as well as social institution, characterized by an implicit contract and reciprocal exchange of trust, goodwill, and commitment between employers and workers. We argue that this institution emerged as an equilibrium outcome of the dynamic interactions among management, labor, and government and became an integral part of the nation's employment system over the past hundred years, reinforced by complementary institutions such as state welfare policies, labor laws, corporate governance, social norms, family values, and education system. Based on our long-run historical analysis, we reevaluate the cost and benefit both in terms of economic and social of the lifetime employment system and explore the factors that determine its efficiency and stability. We emphasize the importance of understanding labor market conditions, technology and the nature of human capital, interactions between social and economic aspects of employment relations, and the role of complementary institutions. The paper concludes by assessing changes in these factors in the post-bubble period, offering some insights to the future course of the Japanese employment system.
|Date of creation:||01 Sep 2004|
|Date of revision:|
|Publication status:||Published in Institutional Change in Japan, Blomstrom, Magnus, La Croix, Sumner (eds.), 2006, pages 152-176, Routledge.|
|Contact details of provider:|| Postal: The European Institute of Japanese Studies, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden|
Web page: http://www.hhs.se/en/Research/Institutes/EIJS/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- George Baker & Robert Gibbons & Kevin J. Murphy, 1994. "Subjective Performance Measures in Optimal Incentive Contracts," The Quarterly Journal of Economics, Oxford University Press, vol. 109(4), pages 1125-1156.
- Peter AUER & Sandrine CAZES, 2000. "The resilience of the long-term employment relationship: Evidence from the industrialized countries," International Labour Review, International Labour Organization, vol. 139(4), pages 379-408, December.
- Casey Ichniowski & Kathryn Shaw, 2003. "Beyond Incentive Pay: Insiders' Estimates of the Value of Complementary Human Resource Management Practices," Journal of Economic Perspectives, American Economic Association, vol. 17(1), pages 155-180, Winter.
- Jones, Derek C & Kato, Takao, 1995. "The Productivity Effects of Employee Stock-Ownership Plans and Bonuses: Evidence from Japanese Panel Data," American Economic Review, American Economic Association, vol. 85(3), pages 391-414, June.
- Hashimoto, Masanori & Raisian, John, 1985. "Employment Tenure and Earnings Profiles in Japan and the United States," American Economic Review, American Economic Association, vol. 75(4), pages 721-35, September.
- Hashimoto, Mansanori, 1993. "Aspects of Labor Market Adjustments in Japan," Journal of Labor Economics, University of Chicago Press, vol. 11(1), pages 136-61, January.
- Ichniowski, Casey & Shaw, Kathryn & Prennushi, Giovanna, 1997. "The Effects of Human Resource Management Practices on Productivity: A Study of Steel Finishing Lines," American Economic Review, American Economic Association, vol. 87(3), pages 291-313, June.
When requesting a correction, please mention this item's handle: RePEc:hhs:eijswp:0205. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Nanhee Lee)
If references are entirely missing, you can add them using this form.