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The Path to Higher Growth: Does Revamping Japan's Dual Labor Market Matter?

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by Chie Aoyagi & Giovanni Ganelli
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The Path to Higher Growth: Does Revamping Japan's Dual Labor Market Matter? by Chie Aoyagi & Giovanni Ganelli

This paper argues that Japan’s excessive labor market duality can reduce Total Factor Productivity (TFP) due to a negative impact on non-regular workers’ effort and on firms’ incentives to train them. On the basis of cross-country empirical evidence, the paper proposes some reform options. In particular, our analysis suggests that reducing the difference in employment protection between regular and non-regular workers would substantially reduce labor market duality in Japan. One reform consistent with these findings is the introduction of a Single Open Ended Contract for all newly hired workers. This reform could be complemented by a shift towards a model that combines labor market flexibility and security (“flexicurity”) and by policies aimed at encouraging wage growth.

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Ebook Details
Pages: 26
Size: 1.6 MB
Publisher: INTERNATIONAL MONETARY FUND
Date published:   2013
ISBN: 9781484366103 (DRM-EPUB)

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This product is listed in the following categories:

Nonfiction > Business & Economics > Economics
Nonfiction > Business & Economics > International > Economics
Nonfiction > Business & Economics > Economics > Macroeconomics

These authors have products in the following categories:

Nonfiction > Business & Economics
Nonfiction > Business & Economics > Economics
Nonfiction > Business & Economics > International > Economics
Nonfiction > Business & Economics > Economics > Macroeconomics
Nonfiction > Business & Economics > Corporate Governance

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03/28/2017
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