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LIST  March 2017

LIST March 2017

Subject:

Re: Labor market elasticities

From:

Rochelle Kopp <[log in to unmask]>

Reply-To:

NBR's Japan Forum <[log in to unmask]>

Date:

Thu, 9 Mar 2017 11:01:32 -0800

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Arthur:  I wonder if it's " female workers do not benefit from the lifetime employment system " or is it really " female workers do not choose to benefit from the lifetime employment system."  For example, drop-out rate of female seishain is quite high, and also many Japanese women decide to not go after seishain positions in the first place even if they are (theoretically) available to them.

Peter:  If a non-economist, practicing consultant like myself is acceptable, would be interested in being a volunteer reader.

Rochelle Kopp

-----Original Message-----
From: Alexander Arthur [mailto:[log in to unmask]] 
Sent: Wednesday, March 08, 2017 7:15 AM
Subject: Labor market elasticities

So, how big is lifetime employment. My original statement was that it comprised roughly 20% of the workforce, but also that it was a powerful norm that most companies respected if they could afford it.

My main source for the estimate is Hiroshi Ono, “Lifetime Employment in Japan: Concepts and Measurements,” Journal of the Japanese and International Economies (24), 2010, 1-27.

He uses two methods for his estimations. The first relies on on what he calls the ex-ante technique. For example, a university graduate hired by a large corporation is most likely in the  lifetime category. A female high school graduate working as a waitress  is not. In the ex-ante approach, he also uses job designations; a “regular” employee with seishain status is considered “lifetime.”

Ono’s ex-post analysis measures job tenure in several ways from different sources of data, classifying workers by their actual job experience. Jumping to his conclusions:

"How big is lifetime employment in Japan? While lifetime employment is often touted as one of the main pillars of the Japanese employment system, in practice it applies only to a small portion of the labor force. My estimations based on various methods point to roughly 20%, a much smaller percentage compared to previous estimates: (i) The ex-ante measure of the core workforce, which assumes that lifetime employment coverage is limited to male standard workers in large firms (>500) and in government, is 19%; (ii) The proportion of lifetime workers defined as those in the age group 50–54 who have never left their employers since school graduation, is 20%; and (iii) The probability of surviving job separations for 30 years is 20%. 

Yet, the lifetime employment rate varies considerably by gender, firm size, and education level. My analysis solidly confirms the generalized view that female workers do not benefit from the lifetime employment system, while male workers in large firms (and in government) are most likely to be covered by it. At its extreme, the proportion of lifetime workers among male university graduates in large firms is 46%, and the 30 year survival probability of male workers in government is 65%."
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