Employment Adjustment in Japanese Firms: Negative Profits and Dismissals

Terukazu Suruga

Chapter 9 in Internal Labour Markets, Incentives and Employment, 1998, pp 196-221 from Palgrave Macmillan

Abstract: 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.

Keywords: Large Loss; Adjustment Cost; Adjustment Coefficient; Japanese Firm; Actual Employment (search for similar items in EconPapers)
Date: 1998
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DOI: 10.1057/9780230377974_9

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