Why Are Japanese Wages So Sluggish?

Author/Editor:

Martin Sommer

Publication Date:

May 1, 2009

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

Over the past decade, productivity-adjusted wages have grown at a slower pace in Japan than in other rich countries. This paper suggests that Japan's dualities between regular and "nonregular" labor market contracts and the relatively inefficient services sector have exacerbated the negative impact of globalization and technical change on the labor income share felt in all advanced economies. Reforms aimed at increasing productivity in services and reducing gaps in employment protection and benefits between regular and nonregular workers could help put Japan's wages on an upward trajectory in the medium term.

Series:

Working Paper No. 2009/097

Subject:

Employment Labor markets Labor share Productivity Wages

English

Publication Date:

May 1, 2009

ISBN/ISSN:

9781451872446/1018-5941

Stock No:

WPIEA2009097

Pages:

21

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