Working Paper: NBER ID: w3155
Authors: Katharine G. Abraham; Susan N. Houseman
Abstract: This paper compares employment and hours adjustment in Japanese and U.S. manufacturing. In contrast to some previous work, we find that adjustment of total labor input to demand changes is significantly greater in the United States than in Japan; adjustment of employment is significantly greater in the United States, while that of average hours is about the same in the two countries. Although workers in Japan enjoy greater employment stability than do U.S. workers, we find considerable variability in the adjustment patterns across groups within each country. In the United States, most of the adjustment is borne by production workers. In Japan, female workers, in particular, bear a disproportionate share of adjustment.
Keywords: job security; workforce adjustment; U.S. manufacturing; Japanese manufacturing
JEL Codes: J63; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Adjustment of total labor input to demand changes (J29) | Employment adjustment in the U.S. is greater than in Japan (J68) |
| Employment adjustment in the U.S. is greater than in Japan (J68) | Responsiveness of labor input to demand fluctuations (J20) |
| Employment elasticities for women are higher than for men in both countries (J21) | Employment adjustment patterns (J68) |
| Smaller Japanese enterprises buffer larger firms during economic fluctuations (L25) | Employment adjustment burden on female workers in Japan (J21) |
| Total hours adjustment in U.S. manufacturing (L69) | Total hours adjustment in Japanese manufacturing (L23) |