The insider-outsider model has been used to explain the persistence of
shacks to unemployment in Japan. This model of Japanese union behavio
r is tested using both firm-level and aggregate-level data. The eviden
ce does not provide support for the insider-outsider model, and thus t
his mechanism for persistence. However, the evidence does show that Ja
panese unions have a stronger preference for employment stability than
U.S. unions. (C) 1998 Elsevier Science B.V.