Question

Japan has a tradition of lifetime employment, where companies hire workers after they graduate from school and the workers remain at the same company for the rest of their working life. How does this help explain Japan’s lower unemployment rate? (Hint: which of the three categories of unemployment is likely to be lower in Japan than the U.S.).

Answer 1

Answer

One of the distinctive characteristic of Post war labor system of Japan is the Life time employement .It is true that it have never been applied to many workers and is declining now .In this system of life time employement first the compnay hire those graduate out of the school and make them employee throughout retirement .For their general potential new employees are chosen .It is not based on thier specific training or skill an they are considered as the human capital of the company whom the company train , assigned to position , cultivated in the best interest of company .The employee not have to leave the company for betetr positions and in return the employer willnot leave him/her in even the severe economc conditions .This system is used by the company for promoting their own employees to higher managerial levels .This system worked very well in the post war economic condition of the japan an now it is declining and begun to break down.This lead to lower unemployement as the graduate who pass out every year get the job in time and dont have to worry or struggle for their career and not many people were educate that time so it was easy to get employe but now things have changed and more and more graduates passed out every year which make the competition tough.The unemployement rate of Japan is lower than that of US if we acount for the definitioal differences betwen these two countries. The better performance of Japan is because of the employement system they follow which has a biasing against a reduction in no. of worker whoa are employed and it favor the variation in the hr. worked / capita

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