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Inequality in the WorkplaceLabor Market Reform in Japan and Korea$
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Jiyeoun Song

Print publication date: 2014

Print ISBN-13: 9780801452154

Published to Cornell Scholarship Online: August 2016

DOI: 10.7591/cornell/9780801452154.001.0001

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Japan: Liberalization for Outsiders, Protection for Insiders

Japan: Liberalization for Outsiders, Protection for Insiders

(p.84) 4 Japan: Liberalization for Outsiders, Protection for Insiders
Inequality in the Workplace

Jiyeoun Song

Cornell University Press

This chapter examines the political processes and outcomes of Japan's labor market reform over the past two decades. During this time, Japan has adopted more market-oriented principles in the labor market than before, such as the increase of labor market flexibility and the diversification of employment and working conditions. However, it did not conform to the neoliberal model of the labor market, represented by easy hiring and firing practices in response to the fluctuations of the business cycle. The institutional arrangements of employment protection systems and decentralized industrial relations affected the trajectory of Japan's reform by shaping the incentives and strategies of employers, workers, and policy makers; and leading to the formation of a political coalition in support of reform for outsiders, while retaining insider-favored social protections. Such institutional configurations transferred the costs of labor adjustments to an increasing number of outsiders, exacerbating inequality and dualism in the Japanese labor market.

Keywords:   Japanese labor market reform, labor market flexibility, employment protection, labor market inequality, dualistic labor market

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