Working Paper: NBER ID: w4414
Authors: Edward B. Montgomery
Abstract: In this paper I examine regional labor market behavior in the United States and Japan. In contrast with the picture at the aggregate level, Japanese labor markets at the prefectural (regional) level appear to exhibit substantially more persistence than state level labor markets in the United States. The distribution (and positions of regions within the distribution) of wages, unemployment, employment growth, and migration remain remarkably constant in Japan for periods of up to 15 years. Although wages, unemployment, and migration appear to be driven by similar factors in both countries, wages appear to be slightly more sensitive while unemployment is less sensitive to demand shifts in Japan than in the U.S.
Keywords: Labor Market; Regional Adjustment; Japan; United States
JEL Codes: J64; J63
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| stability of wages in Japan (J31) | less variability in unemployment rates (J69) |
| wage-setting practices in Japan (J33) | more responsive wage structure (J31) |
| government policies and institutions (O43) | differences in labor market dynamics (J29) |
| differences in labor market interventions (J48) | observed differences in flexibility (D29) |
| lack of coordinated national policies (H59) | U.S. labor markets might be less responsive (J49) |