Nakata.

• Position: Brief Article

People have long believed that Japanese firms, particularly large ones, have upheld their employment commitments to workers despite any unfavorable economic conditions. But now, this practice has been criticized as the major cause of the prolonged Heisei recession. Nakata compares the employment adjustment among different industries and among firms in those industries and uses per-capita total labor cost in place of average monthly salary as the relative factor price variable reflecting the growing share of nonwage total labor costs. He also uses both single firm data and consolidated firm data to investigate the impact of Shukko, a common Japanese employment practice of...