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Lifetime Employment in Japan: Concepts and Measurements

This paper poses three fundamental questions about lifetime employment in Japan: How big is it? How unique is it? And, how is it changing? I examine different concepts and methods for estimating lifetime employment and conclude that it covers roughly 20 percent of the Japanese labor force. Job mobility remains considerably lower in Japan than in other economies (particularly the U.S.). Evidence regarding changes in lifetime employment is mixed. The share of workers in the core, an ex-ante measure of lifetime employment, is declining. But the probability of job separations has remained stable for those who are already in the system. I also find evidence that the incentives among workers, managers and executives are aligned to preserve the lifetime employment system.

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File URL: http://swopec.hhs.se/hastef/papers/hastef0624.pdf
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Paper provided by Stockholm School of Economics in its series SSE/EFI Working Paper Series in Economics and Finance with number 624.

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Length: 59 pages
Date of creation: 28 Mar 2006
Date of revision: 06 Apr 2007
Publication status: Published in Journal of the Japanese and International Economies, 2010, pages 1-27.
Handle: RePEc:hhs:hastef:0624
Contact details of provider: Postal: The Economic Research Institute, Stockholm School of Economics, P.O. Box 6501, 113 83 Stockholm, Sweden
Phone: +46-(0)8-736 90 00
Fax: +46-(0)8-31 01 57
Web page: http://www.hhs.se/
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  1. Flath, David, 2014. "The Japanese Economy," OUP Catalogue, Oxford University Press, edition 3, number 9780198702405.
  2. Hall, Robert E, 1982. "The Importance of Lifetime Jobs in the U.S. Economy," American Economic Review, American Economic Association, vol. 72(4), pages 716-24, September.
  3. Neumark, David & Polsky, Daniel & Hansen, Daniel, 1999. "Has Job Stability Declined Yet? New Evidence for the 1990s," Journal of Labor Economics, University of Chicago Press, vol. 17(4), pages S29-64, October.
  4. Gregg, Paul & Wadsworth, Jonathan, 1995. "A Short History of Labour Turnover, Job Tenure, and Job Security, 1975-93," Oxford Review of Economic Policy, Oxford University Press, vol. 11(1), pages 73-90, Spring.
  5. Kato, Takao, 2001. "The End of Lifetime Employment in Japan?: Evidence from National Surveys and Field Research," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 489-514, December.
  6. repec:cup:cbooks:9780521642408 is not listed on IDEAS
  7. Ureta, Manuelita, 1992. "The Importance of Lifetime Jobs in the U.S. Economy, Revisited," American Economic Review, American Economic Association, vol. 82(1), pages 322-35, March.
  8. Ono, Hiroshi, 2006. "Lifetime Employment in Japan: Concepts and Measurements," SSE/EFI Working Paper Series in Economics and Finance 624, Stockholm School of Economics, revised 06 Apr 2007.
  9. 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.
  10. Houseman, Susan N & Abraham, Katharine G, 1993. "Female Workers as a Buffer in the Japanese Economy," American Economic Review, American Economic Association, vol. 83(2), pages 45-51, May.
  11. Hiroshi Ono & Marcus E. Rebick, 2003. "Constraints on the Level and Efficient Use of Labor in Japan," NBER Working Papers 9484, National Bureau of Economic Research, Inc.
  12. Clark, Robert L & Ogawa, Naohiro, 1992. "Employment Tenure and Earnings Profiles in Japan and the United States: Comment," American Economic Review, American Economic Association, vol. 82(1), pages 336-45, March.
  13. E. Paul Durrenberger, 2005. "Labour," Chapters, in: A Handbook of Economic Anthropology, chapter 8 Edward Elgar.
  14. Marcus Rebick, 2000. "Japanese Labour Markets: Can we Expect Significant Change?," Economics Series Working Papers 21, University of Oxford, Department of Economics.
  15. Diebold, Francis X & Neumark, David & Polsky, Daniel, 1997. "Job Stability in the United States," Journal of Labor Economics, University of Chicago Press, vol. 15(2), pages 206-33, April.
  16. 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.
  17. Hiroshi Ono & Marcus Rebick, 2003. "Constraints on the Level and Efficient Use of Labor," NBER Chapters, in: Structural Impediments to Growth in Japan, pages 225-258 National Bureau of Economic Research, Inc.
  18. Rebick Marcus E., 1993. "The Persistence of Firm-Size Earnings Differentials and Labor Market Segmentation in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 7(2), pages 132-156, June.
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