Employment and wage adjustments at firms under distress in Japan: An analysis based upon a survey

Kenn Ariga and Ryo Kambayashi ()

Journal of the Japanese and International Economies, 2010, vol. 24, issue 2, 213-235

Abstract: We use the result from a survey of Japanese firms in manufacturing and service to investigate the choice of wage and employment adjustments when they needed to reduce substantially the total labor cost. Our regression analysis indicates that the large size reduction favors the layoffs of the core employees, whereas the base wage cuts are more likely if the firms do not feel immediate pressures from the external labor market or the strong competition in the product market. We also find some evidence that the concerns over adverse selection or demoralizing effects of wage cuts are real. Firms do try to avoid using base wage cuts if they consider these factors more important.

Keywords: Wage; and; employment; adjustments; Japanese; labor; market (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (9)

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Related works:
Chapter: Employment and Wage Adjustments at Firms under Distress in Japan: An Analysis Based upon a Survey (2010)
Working Paper: Employment and Wage Adjustments at Firms under Distress in Japan: An analysis based upon a survey (2009)
Working Paper: Employment and Wage Adjustments at Firms under Distress in Japan: An Analysis Based upon a Survey (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jjieco:v:24:y:2010:i:2:p:213-235

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