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Abstract

Vol. 53, No. 2, pp. 97-116 (2002)

“Wage Systems and Labor Markets in Japan -A Perspective-”
Jiro Nakamura (Faculty of Economics, Tokyo Metropolitan University), Isao Ohashi (Graduate School of Economics, Hitotsubashi University)

There is a large and growing interest in the evolution of the internal workings of Japanese firms. Since the collapse of the bubble economy in 1991 Japanese firms seem to have been changing the traditional internal labor market characterized by the seniority-based system of wages and long-term employment. This paper attempts to survey the evolution of Japanese systems since the World War II, focusing on what systems have been adopted in distributing the wage fund to individual workers in a firm and on how labor market conditions have affected the system. Recent developments in the theory of organization and incentives makes Japanese economists interested in the actual practice of wage distribution among workers in a firm and its economic meaning.