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Why Are Japanese Wages So Sluggish?

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  • Mr. 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

  • Mr. Martin Sommer, 2009. "Why Are Japanese Wages So Sluggish?," IMF Working Papers 2009/097, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2009/097
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    References listed on IDEAS

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    1. 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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    Cited by:

    1. Kiichi Tokuoka, 2010. "Rebalancing in Japan: The Role of Private Consumption," IMF Working Papers 2010/293, International Monetary Fund.
    2. Carlos A. Ibarra & Jaime Ros, 2017. "The decline of the labour share in Mexico: 1990-2015," WIDER Working Paper Series wp-2017-183, World Institute for Development Economic Research (UNU-WIDER).
    3. 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.
    4. Ibarra, Carlos A. & Ros, Jaime, 2019. "The decline of the labor income share in Mexico, 1990–2015," World Development, Elsevier, vol. 122(C), pages 570-584.
    5. International Monetary Fund, 2010. "Japan: Selected Issues," IMF Staff Country Reports 2010/212, International Monetary Fund.
    6. 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).
    7. Nicolas Fleury & Sylvain Petit & Aurélie Cassette, 2012. "Income inequalities and international trade in goods and services: short and long-run evidence," Post-Print hal-01831503, HAL.
    8. Latsos Sophia, 2018. "Real Wage Effects of Japan’s Monetary Policy," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 69(1), pages 177-215, July.
    9. Pelin Berkmen, 2011. "The Impact of Fiscal Consolidation and Structural Reformson Growth in Japan," IMF Working Papers 2011/013, International Monetary Fund.
    10. Joshua K. Hausman & Johannes F. Wieland, 2015. "Overcoming the Lost Decades? Abenomics after Three Years," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(2 (Fall)), pages 385-431.
    11. International Labour Organisation ILO, 2015. "Global Wage Report 2014/15: Wages and Income Inequality," Working Papers id:7345, eSocialSciences.
    12. Mr. Chad Steinberg & Mr. Masato Nakane, 2011. "To Fire or to Hoard? Explaining Japan’s Labor Market Response in the Great Recession," IMF Working Papers 2011/015, International Monetary Fund.

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