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Labor Market Adjustment to Globalization: Long-Term Employment in the United States and Japan

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  • Henry S. Farber

    (Princeton University)

Abstract

The increasing globalization of production and trade in the last 25 years has required substantial adjustment of employment relationships in the United States and Japan. Worker attachment to firms has always been lower in the U.S. than in Japan, and this is reflected in a difference in institutions. As both the U.S. and Japan have been faced with similar global competitive pressures, firms in the two countries have responded in ways that are consistent with their histories, institutions, and demographics. Firms in the United States have laid off workers, even those in long-term primary jobs. Firms in Japan have taken the approach of reassigning workers to other, perhaps lesser, jobs, seconding workers to other firms, and making more use of part-time and secondary jobs. The result of this difference in strategies is that the Japanese-U.S. gap in worker attachment to firms has widened, particularly for males. Interestingly, the Japanese labor market has made increased use of part-time and other non-standard workers, particularly for females, to an extent not seen in the United States.

Suggested Citation

  • Henry S. Farber, 2007. "Labor Market Adjustment to Globalization: Long-Term Employment in the United States and Japan," Working Papers 1040, Princeton University, Department of Economics, Industrial Relations Section..
  • Handle: RePEc:pri:indrel:519
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    References listed on IDEAS

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    1. Katharine G. Abraham & James L. Medoff, 1984. "Length of Service and Layoffs in Union and Nonunion Work Groups," ILR Review, Cornell University, ILR School, vol. 38(1), pages 87-97, October.
    2. Rebick, Marcus, 2005. "The Japanese Employment System: Adapting to a New Economic Environment," OUP Catalogue, Oxford University Press, number 9780199247240, Decembrie.
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    Cited by:

    1. Georg D. BLIND & Stefania LOTTANTI VON MANDACH, 2015. "Decades not Lost, but Won: Increased Employment, Higher Wages, and More Equal Opportunities in the Japanese Labour Market," Social Science Japan Journal, University of Tokyo and Oxford University Press, vol. 18(1), pages 63-88.
    2. Kawaguchi, Daiji & Ueno, Yuko, 2013. "Declining long-term employment in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 28(C), pages 19-36.
    3. Sebastien Lechevalier & Cyrille Dossougoin & Christophe Hurlin & Satoko Takaoka, 2014. "How did the Japanese Employment System Change?Investigating the Heterogeneity of Downsizing Practices across Firms," KIER Working Papers 883, Kyoto University, Institute of Economic Research.
    4. Sverre Herstad, 2011. "Paradigms, Regimes and the Shifting Notions of Institutional Best Practice," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 2(2), pages 173-191, June.
    5. Izumi, Atsuko & Kodama, Naomi & Kwon, Hyeog Ug, 2023. "Labor market concentration and heterogeneous effects on wages: Evidence from Japan," Journal of the Japanese and International Economies, Elsevier, vol. 67(C).
    6. Bell, David N.F. & Blanchflower, David G., 2011. "The Crisis, Policy Reactions and Attitudes to Globalization and Jobs," IZA Discussion Papers 5680, Institute of Labor Economics (IZA).

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    More about this item

    Keywords

    Japan; United States;

    JEL classification:

    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor

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