ASPECTS OF LABOR-MARKET ADJUSTMENTS IN JAPAN

This article discusses some aspects of labor market adjustments in Jap an that may be relevant to the low unemployment rate there. Japanese s tatistics treat kyugyosha (persons not at work) as being employed, but some of these workers would be counted as unemployed in the United St ates. The kyugyosha group appears to increase in size during downturns and decreases during upturns, suggesting that temporarily laid-off pe rsons are an important part of this group. Japanese employers evidentl y rely less on employment adjustments, and more on adjustments in hour s of work and inventory, while employers in the United States rely mor e on employment adjustments, to deal with cyclical changes in product demand. Japanese manufacturing employment became less sensitive, and h ours of work more sensitive, to demand shocks after the introduction o f the Employment Insurance Law in 1975.