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Trends in Unemployment, Wages and Productivity: The Case of Japan

1986; Wiley; Volume: 53; Issue: 210 Linguagem: Inglês

10.2307/2554382

1468-0335

Koichi Hamada, Yoshio Kurosaka,

Housing, Finance, and Neoliberalism

Along with the high savings ratio, the functioning of the labour market is one of the most important factors behind the macroeconomic performance of the postwar Japan, which foreign observers have christened the 'miracle of the Rising Sun'. In the first place, the nature of the Japanese labour market is important for the long-run trend of Japanese economic growth because labour, and its quality, are crucial factors for economic development. The high quality of a well disciplined workforce, as well as the migration of labour from rural to urban areas, has contributed much to the rapid growth of the Japanese economy. Second, the nature of the labour market has influenced the pattern of Japanese business cycles by buffering demand fluctuations. The slow response of firms' demand for labour, combined with the fast response of the labour force participation ratio, has prevented a sharp increase in the unemployment rate during recessions. Relatively flexible nominal and real wages have also enabled the Japanese economy to adjust quite smoothly to supply shocks, notably after the second oil crisis. In this paper we shall review trends in unemployment, wages and productivity in the postwar Japanese economy, and relate them to its macroeconomic performance. We shall also summarize the current literature concerning features of the labour market, evaluate quantitative estimates of trends in labour statistics, and explore future prospects.