Abstract
Japanese aggregate employment for the entire economy or industrial sectors is very stable over time. In comparison with other developed countries, change of aggregate employment to change of output is also small in Japan. On the other hand, we are able to find individual firms experiencing annual employment changes exceeding the 10–20 per cent range as shown by Chuma (1994). The ordinary smooth employment adjustment model cannot explain these rapid declines in employment appropriately. This chapter presents a negative profit employment adjustment model and attempts to explain the movement of employment in some Japanese large firms experiencing rapid decline in employment.
I am very grateful to Susan Houseman, Takenori Inoki, Akira Kawaguchi, Kuramitsu Muramatsu, Isao Ohashi and Fumio Ohtake for useful comments on an earlier draft of this chapter. Remaining errors are mine.
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© 1998 Palgrave Macmillan, a division of Macmillan Publishers Limited
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Suruga, T. (1998). Employment Adjustment in Japanese Firms: Negative Profits and Dismissals. In: Ohashi, I., Tachibanaki, T. (eds) Internal Labour Markets, Incentives and Employment. Palgrave Macmillan, London. https://doi.org/10.1057/9780230377974_9
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DOI: https://doi.org/10.1057/9780230377974_9
Publisher Name: Palgrave Macmillan, London
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