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Why Are Japanese Wages So Sluggish?

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  • Martin Sommer

Abstract

Over the past decade, productivity-adjusted wages have grown at a slower pace in Japan than in other rich countries. This paper suggests that Japan's dualities between regular and "nonregular" labor market contracts and the relatively inefficient services sector have exacerbated the negative impact of globalization and technical change on the labor income share felt in all advanced economies. Reforms aimed at increasing productivity in services and reducing gaps in employment protection and benefits between regular and nonregular workers could help put Japan's wages on an upward trajectory in the medium term.

Suggested Citation

  • Martin Sommer, 2009. "Why Are Japanese Wages So Sluggish?," IMF Working Papers 09/97, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:09/97
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    References listed on IDEAS

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    1. Oliver J. Blanchard, 1997. "The Medium Run," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 28(2), pages 89-158.
    2. Andrea Bassanini & Romain Duval, 2006. "Employment Patterns in OECD Countries: Reassessing the Role of Policies and Institutions," OECD Social, Employment and Migration Working Papers 35, OECD Publishing.
    3. Florence Jaumotte & Irina Tytell, 2007. "How Has The Globalization of Labor Affected the Labor Income Share in Advanced Countries?," IMF Working Papers 07/298, International Monetary Fund.
    4. Bentolila Samuel & Saint-Paul Gilles, 2003. "Explaining Movements in the Labor Share," The B.E. Journal of Macroeconomics, De Gruyter, vol. 3(1), pages 1-33, October.
    5. Robert C. Feenstra, 2007. "Globalization and Its Impact on Labour," wiiw Working Papers 44, The Vienna Institute for International Economic Studies, wiiw.
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    Citations

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    Cited by:

    1. Kodama, Naomi & Inui, Tomohiko & Kwon, Hyeogug, 2014. "A Decomposition of the Decline in Japanese Nominal Wages in the 1990s and 2000s," CIS Discussion paper series 631, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    2. Carlos A. Ibarra & Jaime Ros, 2017. "The decline of the labour share in Mexico: 1990–2015," WIDER Working Paper Series 183, World Institute for Development Economic Research (UNU-WIDER).
    3. International Labour Organisation ILO, 2015. "Global Wage Report 2014/15: Wages and Income Inequality," Working Papers id:7345, eSocialSciences.

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