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LIST  March 2017

LIST March 2017

Subject:

Re: Labor market elasticities

From:

Oliver Mackie <[log in to unmask]>

Reply-To:

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

Date:

Thu, 9 Mar 2017 22:50:43 +0000

Content-Type:

text/plain

Parts/Attachments:

Parts/Attachments

text/plain (205 lines)

Mr. Matanle's many points are well taken and the clear expertise behind them well-noted. If we are looking for the most nuanced picture possible, then it also needs to be mentioned that the Doctrine of loyalty and adherence to it (which he points to as expanding the extent of LTE vis-a-vis economists' calculations) is not of a uniform nature even across seishain in the same corporation. To take the most obvious example, men and women. Many female seishain are simply not expected to remain loyal beyond a certain age. Failure by a woman to explicitly state during the hiring process that she is applying for 'management track' position is effectively an admission that employment will not be lifetime. It is true that legally such women could not be fired, but were they suddenly, in significant numbers, break the implicit understanding and try to stay on until retirement age, the business models of a significant number of corporations would collapse. 
--------------------------------------------
On Wed, 3/8/17, Peter Matanle <[log in to unmask]> wrote:

 Subject: Re: [NBR's_Japan_Forum] Labor market elasticities
 To: [log in to unmask]
 Date: Wednesday, March 8, 2017, 6:23 PM
 
 Most numerical
 definitions of the scope of LTE are done by labour
 economists who perform calculations using the Labour Force
 Survey and other datasets that involve segmentations which
 remove a good proportion of legitimate lifetime employees
 from their final estimate. Their reason for this is to be
 able to exclude workers who would not qualify. Ono, for
 example acknowledges there is no theoretical or
 methodological reason for segmentation at 500 employees per
 organisation, yet most labour economists' definitions of
 LTE do. Sony and Honda both at one time had fewer than 500
 employees in the early postwar period, for example. There is
 also no justification in 2017 for excluding all regular
 female employees from LTE, as most calculations do. And few
 acknowledge that many older non-regular employees are in
 fact lifetime employees due to being rehired by their
 employing organisation after mandatory retirement as
 'entrusted' employees. Moreover, company
  executives are not included among regular
 workers by the Statistics Bureau in the Labour Force Survey,
 and therefore not counted by some calculations, but we all
 know that the great majority are in-bred lifetime employees.
 Although estimates from the perspectives of sociology are
 less numerically precise than economics, they exclude fewer
 people that would qualify. I think these sorts of
 considerations are valid and would boost, by my estimation,
 the proportion of those employed under the implicit LTE
 'contract' to at least 30 per cent of all employed
 workers.
 
 In addition, it
 needs to be acknowledged that the emotional/psychological
 contract goes both ways - that just as employers are bound
 by the doctrine of abusive dismissal to 'commit' to
 their regular employees (and some non-regular employees by
 analogy with the Doctrine), so employees are bound by their
  'duty' to maintain their loyalty to their
 employing organisation, and these norms are also held by
 many workers who would not be considered 'lifetime'
 employees in the strictest labour economist understanding of
 that term - such as regular employees in SMEs (which, if
 they don't go bust, can't fire the employee, so long
 as they abide by the Doctrine). If we take this
 'duty' into account, then the proportion of employed
 workers would rise still further to perhaps 50 per cent or
 more of employed workers, given that regular workers
 (including company executives) comprise around 65% of
 employed people in Japan. There is also the misunderstood
 and disputed
  status, vis a vis LTE, of
 regular workers who are classified as dispatch workers, and
 therefore routinely counted by analysts as
 'non-regular'.
 
 Of
 course, the above is likely to meet with some disagreement,
 even derision, among neo-classical labour economists, but it
 does go some way to explaining the lack of elasticity
 observed.
 
 Myself and three
 colleagues (none of us economists) have now completed drafts
 of 7 of a planned 10 chapters of a book on precisely the
 above topics. I would welcome some volunteer readers to
 critique our work so that we can make it more robust and
 nuanced in preparation for publication some time in
 2017/18.
 
 Cheers.
 
 Peter
 
 
 ----- Original Message
 -----
 >From: Japan Forum Member <[log in to unmask]>
 >To: [log in to unmask]
 
 >Date: 2017/3/6, Mon 19:41
 >Subject: Re: [NBR's_Japan_Forum] Labor
 market elasticities
 > 
 >
 >
 >
 >I think there is a
 tendency to over-focus on the "limited impact" of
 lifetime employment in terms of it only applying to a
 minority of the work force.  The system was designed (which
 of course suggests more intent than was likely involved) so
 that a single worker could support a whole family.  A
 significant number of workers in non-lifetime employment
 jobs were (are) likely to be spouses or cohabitating
 children of someone who was/is, and for whom the job is a
 source of supplemental income. I think it is a basic mistake
 to look at employment in Japan (and possibly anywhere) in
 terms of individuals rather than family units. I am not an
 economist but I assume that part of the reason Japan has
 managed to have three decades of recession while retaining
 seemingly robust consumer spending is in part due to the
 magic of many working adult children staying at home rather
 than seeking to become independent economic units. 
 >
 >
 >
 >Colin Jones    
 >
 >
 >
 >
 >
 >
 >
 >________________________________
 > From: Paul Kelley <[log in to unmask]>
 >To: [log in to unmask]
 
 >Sent: Monday, March 6, 2017 5:00 PM
 >Subject: Re: [NBR's_Japan_Forum] Labor
 market elasticities
 > 
 >
 >
 >  Below are a two quotes from the message
 sent from Arthur Alexander on March 4th.         
 >He makes reference to how “Lifetime
 employment” seemed to have greatly lessened the
 responsiveness of employment to changes in output.
 >  At the end of his message (in the 2nd
 quote), he said that "lifetime employment always
 affected only about 20% of the workforce." I find it
 difficult to believe that the percentage was that low.
 >  It seems to me that in the 1970s,1980s
 and 1990s it was much higher. I would be interested in
 hearing what others might think about this. Also, I would
 like to hear what you may think about the percentage of
 workers today who fit in the category of “Lifetime
 employment.”
 >
 >
 >-----------------------------
 >On Mar 4, 2017, at 11:53 AM, Alexander
 Arthur <[log in to unmask]>
 wrote:
 >
 >
 >In the 1990s, I tried estimating the
 responsiveness of Japanese employment to changes in output.
 For example, if output changes by 5%, by what percent does
 employment change? The first time I did this, the
 employment response was almost unmeasurable.I recall
 running down the hall at the Japan Economic Institute to
 show my colleague, Doug Ostrom, the findings. He just shook
 his head and muttered, "Lifetime employment.”
  In contrast, the US figures showed 100% response. The
 elasticity was 1.0, spread over two years; about 2/3 in the
 first year and 1/3 the second. 
 >>
 >
 > Lifetime employment
 always affected only about 20% of the work force, although
 it was a powerful norm that most companies respected if they
 could afford it.
 >--------------------------
 >
 >
 >To unsubscribe from the list, send an email
 to: [log in to unmask]
 >
 >
 >
 >To unsubscribe from
 the list, send an email to: [log in to unmask]
 >
 >
  
 Dr Peter Matanle
 Senior
 Lecturer in Japanese Studies,
 National
 Institute of Japanese Studies and School of East Asian
 Studies
 University of Sheffield, UK, Tel:
 +44 (0)114 222 8407
 General Editor,
 electronic journal of contemporary japanese studies
 Website: www.japanesestudies.org.uk
 e-mail: [log in to unmask]
 
 ########################################################################
 
 To unsubscribe from the list,
 send an email to: [log in to unmask]

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