Labor Market Adjustments in the Pacific Basin PDF
Preview Labor Market Adjustments in the Pacific Basin
LABOR MARKET ADJUSTMENTS IN THE PACIFIC BASIN LABOR MARKET ADJUSTMENTS IN THE PACIFIC BASIN edited by Peter T. Chinloy and Ernst W. Stromsdorfer Kluwer-Nijhoff Publishing a member of the Kluwer Academic Publishers Groups Boston Dordrecht Lancaster Distributors forthe Untted States and Canada: Kluwer Academic Publishers, 101 Philip Drive, Norwell, MA02061 , USA forthe UK and Ireland: Kluwer Academic Publishers, MTP Press Umited, Falcon House, Queen Square, Lancaster LA 1 IRN, UK for all other countries: Kluwer Academic Publishers Group, Distribution Centre, P.O. Box 322, 3300 AH Dordrecht, The Netherlands Library of Congrns Cataloging·I .... Publicatlon Data Labor market adjustments in the Pacific basin. Bibliography: p. Includes index. 1. Labor supply-Pacific Coast (North America) 2. Labor supply-Japan. 3. Foreign trade and employment Pacific Coast (North America) 4. Foreign trade and employment-Japan. I. Chinloy, Peter T., 1950- Ii. Stromadorfer, Ernst W., 1934- HD5722.L33 1986 33.12'099 86-15350 ISBN-13:978-94-010-7958-7 e·ISBN-13:978-94-009-3251-7 DOl: 10,1007/978-94-009-3251-7 Copyright© 1987 by Kluwer-Nijhoff Publishing, Boston. Softcover reprint of the hardcover 1st edition 1987 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, mechanical, photocopying, recording, or otherwise, wtthouttheprior written permission olthe publisher, Kluwer-Nijhoff Publishing, 101 Philip Drive, Norwell, MA02061. Contents Contributing Authors and Participants vii Acknowledgements ix 1 Introduction PeterT. Chinloy and ErnstW. Stromsdorfer Part I Theoretical Framework: Institutions and the labor Market 11 2 A Comparison of Labor Market Equilibria Under Different Institutional 13 Organizations Nicholas H. Kiefer Part II Observed Dislocation: International Comparisons 31 3 Wage Flexibility in the United States and Japan 33 Masanori Hashimoto and John Raisian 4 The Impact of International Trade Shocks on Wage Adjustments in Canada 61 Jean-Michel Cousineau 5 Japanese Redundancy: The Impact of Key Labor Market Institutions on the 79 Economic Flexibility of the Japanese Economy Kazuo Koike v vi CONTENTS 6 The Impact of Mexican Migration on the United States and Mexican 103 Economies and Labor Markets Juan Diez-Canedo Ruiz Part III Domestic and International Shocks: Effects on Employment and Wages 137 7 Wage and Employment Adjustments and the Efficiency Wage Hypothesis: 138 An Application to the Japanese Manufacturing Sector Isao Ohashi 8 The Collective Impact of Sectoral Shocks on Aggregate 161 Employment Fluctuations Joseph G. Altonji and John C. Ham Part IV Compensation of Displaced Workers 203 9 Job Security Versus Income Security 205 G.C. Archibald and Peter T. Chinloy 10 Compensating Displaced Workers - What, How Much, How? 243 Daniel S. Hamermesh, Joseph J. Cordes and Robert S. Goldfarb Index 267 Contributing Authors and Participants Joseph G. Altonji Ben Craig Department of Economics Department of Economics Columbia University Washington State University New York, NY 10027 Pullman, WA 99164 Masahiko Aoki Juan Diez-Canedo Ruiz Department of Economics Superente de Financiamento Externo Stanford University Banco de Mexico Stanford, CA 94305 Condo 6, 90 Piso Cent. Deleg Cuauht., 06059 G.C.Archibald MEXICO, OF Department of Economics University of British Columbia Gregory M. Duncan Vancouver, BC V6T 1W 5 Department of Economics CANADA Washington State University Pullman, WA99164 PeterT. Chinloy Department of Economics Robert S. Goldfarb University of Santa Clara Department of Economics Santa Clara, CA 95053 The George Washington University Washington, DC 20052 Joseph J. Cordes Department of Economics JohnC.Ham The George Washington University Department of Economics Washington, DC 20052 University of Toronto Toronto, Ontario M5S 1A 1 Jean-Michel Cousineau CANADA School of Industrial Relations University of Montreal Daniel S. Hamermesh Montreal, Quebec H3C 3J7 Department of Economics CANADA Michigan State University East Lansing, MI48824 vii viii CONTRIBUTING AUTHORS AND PARTICIPANTS Masanori Hashimoto IsaoOhashi Department of Economics Department of Economics Indiana University Nagoya University Bloomington, IN 47402 Furo-cho, Chikusa-ku Nagoya 464, JAPAN Laurence R. Iannacone Department of Economics Edgar Ortiz University of Santa Clara Universidad Autonoma de Mexico Santa Clara, CA 95053 Civdad Universitaria Alvaro Obregon, 04510 Nicholas M. Kiefer MEXICO, DF Department of Economics Cornell University John Raisian Ithaca, NY 14853 Unicorn Research Corporation 10801 National Boulevard KazuoKoike Los Angeles, CA 90064 Institute of Economic Research Kyoto University Susan Ranney Yoshida-Honmachi, Sakyo-ku Department of Economics Kyoto 606, JAPAN University of Washington Seattle, WA98195 Duane E. Leigh Department of Economics Jaime Serra-Puche Washington State University EI Colegio de Mexico Pullman, WA99164 Camino AI Ajusco 20 Codigo Postal 01000 Hajime Miyazaki 10740 MEXICO, DF Department of Economics Ohio State University ErnstW. Stromsdorfer Columbus,OH43210 Department of Economics Washington State University Ronald Oaxaca Pullman, WA99164 Department of Economics University of Arizona Tuscon, AZ 85721 Acknowledgments This project arose from initial discussions on how to examine the effects on labor markets of rapid changes in exchange rates and the decline of goods producing sectors in the economies of the United States and Canada. Discussions with colleagues in Canada, the United States, Mexico, and Japan suggested that there was extensive international interest in how labor markets adjust to external shocks. This book is a product of that interest. The intention throughout has been to include explicitly the institutions of the labor market, as they are manifested in different societies. The Chapters are all directed to the topic of international labor market adjustment, and contain theoretical modelling, empirical work, and discussion of significant labor market institutions. We acknowledge the research support of the U. S. Department of Labor. This support covered the researchers in the United States, Mexico, and Japan. The researchers in Canada have been supported by the Social Sciences and Humanities Research Council of Canada. Support for the preparation of the manuscript has also been provided by a Presidential Grant from the University of Santa Clara and from the College of Business and Economics at Washington State University. There are several individuals who have provided assistance. This is an incomplete list, as justice cannot be done to all. Dr. William Barnes of the U.S. Department of Labor has provided his personal interest and encour agement. Daniel Hamermesh gave several valuable suggestions on the design of this project. Joy Congdon and Laura Beach have made suggestions on the logistical aspects of the project. The research library at the Massa chusetts Institute of Technology has aided with information retrieval on Mexico. The Word Processing Center of the Washington State University, through Helen Stevens and her staff, produced the book in a most skillful and timely way. IX LABOR MARKET ADJUSTMENTS IN THE PACIFIC BASIN 1 INTRODUCTION Peter T. Chinloy and Ernst W. Stromsdorfer I. Background to Adjustments in Labor Markets The book examines the process of adjustment in labor markets across countries arising from external shocks and shifts in international competi tiveness. The examination of specific countries and their data permits a comparison of alternative institutions for compensating and redeploying labor. Four countries are involved, whose labor markets are both competi tive and complementary: Canada, Japan, Mexico, and the United States. Both public labor market institutions, such as direct government com~ pensation of displaced workers and the effect of unemployment insurance, and private market arrangements, such as em loyer-employee agreements on layoffs, the work contract, and severance pay, are considered. Compara tive examination across countries of labor market and related insitutions is thus possible. The book has a common theme, namely the adjustment of labor markets to exogenous shocks, particularly those externally induced. The unifying focus in on workers whose specific skills in an industry or firm render them relatively immobile. Institutional arrangements in the labor market vary among countries. In Canada and the United States, wages are relatively rigid in the short run, but 1
The list of books you might like
