Abstract
After the collapse of the so-called bubble economy, the labor market of Japan seems to have been changed drastically. High wages and low unemployment because of the structural shortage of workers, and discussions on various social troubles caused by an increasing number of illegal workers who are attracted by the Japanese economic boom, are things of the past. Now, owing to the serious failure of governmental financial management, the unemployment rate has reached about 5 %, which is the highest since 1955. However, it is remarkable that the high unemployment rate has not prevented the Japanese people from enjoying their relatively established lifestyle. Although individuals have no chance of becoming regular members of a company after graduation, they can gain sufficient wealth to enjoy life by working part time. Some middle-aged workers have been dismissed because of the recent serious depression, but, on the other hand, some younger people voluntarily choose to be unemployed or to support themselves by part-time jobs and wait to obtain much better regular jobs. The phenomenon during the last 2 years of an increasing number of job offers with a constant unemployment rate shows that people in Japan are “luxuriously” particular about their jobs.
This paper was originally published by Pacific Economic Review as an article in its Vol.9 (2004) issue.
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Notes
- 1.
Assuming a symmetric two-country economy with labor migration and efficiency wages, Shimada (2007) showed that both the utility of policy authority and workers are higher under intergovernment cooperation than under noncooperation, provided that migration flows are sufficiently sensitive to changes in real-consumption wage differentials.
- 2.
The economy of Japan, which is illustrated in the “Introduction,” is still third largest in the world, and it would be therefore seem that Japan is not a “small” country. But in our one-good model, “small country” only means that it is not large enough to affect the world wage rate, and even Japan meets this definition.
- 3.
It may be more realistic to assume that the wage rate in the home country is related to the number of emigrants. To simplify our analysis, we assume that the home country is large enough to permit the assumption that \( {\overline{w}}^{*} \) is constant and independent of L M and L I.
- 4.
- 5.
In our model, we can conclude that \( d\left({w}_2-\overline{w}\right)/dt<0 \), namely, the economic advantage of being employed in Department 2 rather than being unemployed decreases as the income tax rate increases. We ignore the possibility of workers in either department changing jobs. However, if we assume that N is sufficiently small, and if we assume that unemployed workers have more chance of being employed in Department 1 than in Department 2, then the disadvantage of being unemployed should be less for a native worker.
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Kondoh, K. (2017). International Immigration and Economic Welfare in an Efficiency Wage Model: The Coexistence Case of Both Legal and Illegal Foreign Workers. In: The Economics of International Immigration. New Frontiers in Regional Science: Asian Perspectives, vol 27. Springer, Singapore. https://doi.org/10.1007/978-981-10-0092-8_4
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