Yasushi Ohkusa

Fast track: is it in the genes? The promotion policy of a large Japanese firm

This paper studies the promotion policy of a large, hi-tech manufacturing Japanese firm. We find that the company has multiple ports of entry and hires a significant number of employees with previous job experience. In addition, cohort-peer differentiation in promotion starts much earlier than predicted by the common view, and there are clear signs of fast-track effects, so that individuals promoted faster earlier are more likely to be promoted faster later on. Fast-track effects are not in the genes, because they survive even after controlling for time-invariant individual effects, such as innate individual ability. The last result is difficult to justify using a pure learning model, where ability is time invariant, so that a richer learning model, incorporating, say, human capital considerations, is clearly required.

Estimating the mark-up over marginal cost: a panel analysis of Japanese firms 1971-1994

Abstract In this paper, we propose a new method to estimate mark-ups over marginal cost at the firm level. This method is based on the identity between the short-run elasticity of output to inputs, the mark-up rate, and the factor shares. We then apply this method to a panel of Japanese firms in 21 industries over 24 years. We have three main results. First, there is strong evidence of imperfect competition in this panel, in which internationally competitive industries show low mark-ups. Second, the mark-up rate differs considerably among firms and its distribution is skewed. Third, the mark-up rate over marginal cost shows strong procyclicality, and its sensitivity is uniform within the industry.

Occupational and Internal Labor Markets in Japan

The distinction between internal and occupational labor markets requires the development of informative indicators that go beyond standard measures such as firm size, which are too vague. This article develops an alternative measure, based on the comparison between firm-specific and occupation-specific tenure, and applies it to Japanese occupational data. We believe that the proposed measure is useful not only in classifying different occupations according to the degree of labor market internalization but also in documenting changes over time in job definition, “reengineering” of the corporation, and the like.

Price flexibility in Japan, 1970-1992: A study of price formation1

Abstract We estimate probability and size of price change conditional upon the deviation of a price from its target level for a large number of individual wholesale and consumer price indices in Japan. We find robust and strong asymmetry in price adjustments, especially among CPIs. Cross section variations in price responsiveness depend upon characteristics of distribution channels, in particular, efficiency and input measures of distributive services. Using a simulation model, we also find that the macroscopic downward rigidity almost disappears if the size of the shock is small compared to the target inflation rate.

Internal Labor Markets in Japan: Measuring occupational and internal labor markets

Overview This chapter and chapters 4 and 5 follow up the theoretical insights of chapters 1 and 2 and focus on relevant empirical aspects of Japanese internal and occupational labor markets, including the classification of firms and occupations into different modes of organizing labor, earnings profiles, and internal promotion. In this chapter we look at criteria for classifying occupations into internal (ILM) and occupational (OLM). After developing an operational measure of the degree of internalization of an occupation, we apply it to the analysis of earnings profiles and test whether these profiles are steeper in ILM occupations, as implied by the theory developed in chapter 2. A brief summary concludes the chapter. Review of the literature Key features of internal labor markets are that employees enter the firm at a limited number of ports of entry and progress along well defined job ladders. Wage setting is administered via a series of bureaucratic procedures which, at the minimum, delay and diffuse market forces. Well defined procedures and company norms govern job security rules. Training typically is on-the-job and firm-specific. This plus limited ports of entry makes inter-firm mobility difficult. (Osterman, 1982, p. 350) ILM employment systems usually coexist within a single firm and industry with alternative, and often complementary, ways of organizing labor, including occupational and secondary labor markets. Occupational, or craft, systems are often characterized by greater mobility and more loyalty to the skill or profession than to the firm.

Testing for the matching hypothesis in Japanese manufacturing

Abstract The Matching Hypothesis has a very important implication. However, in Japan, since there is unfortunately no long-term panel data, most research on wage structure has ignored it. This paper tries to test the Matching Hypothesis using two approaches. The first approach is a comparison of actual observed wages with a hypothetical wage stream constructed using the information on the separation rate according to the Matching Hypothesis. The second approach checks the heteroscedasticity of the estimated wage function due to the truncation of the workers distribution. The results show that the Matching Hypothesis can be rejected for almost all types of male workers in Japan.