Post on 24-Dec-2015
Changing Japan- Models and Examples -
Michael SmitkaWashington and Lee University
Chiba University Law & Econ Faculty
Fulbright PresentationJuly 9, 2007
Fulbright Japan Office
© Michael Smitka 2007
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Fulbright Project
• Book on modern Japanese economy• Two underlying themes
– Demographics and its impact– Lots of change despite slow growth
• Issues– Finding relevant examples
• Ones non-economists might find interesting!
– Finding theories• “Change” is a hard subject!
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Theories of change• “Normal” change
– Incremental response to environment
• Policy-induced change– Shifts in regulation (not really “deregulation”!)
• Technology-induced change– For example, 78 & 45 & 331/3
• “Induced” change– Of institutions and “fixed” behavior patterns
• “Revolutions”– Induced change plus a new ideology– Maybe not relevant this time around?
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Normal change
• Incremental change in response• Prices• Incomes
– But direction not rate of change
• Lots of comparative examples, accumulated social science knowledge– Food & Booze:
• TODAY: Eggs and Rice, briefly
– Cars– Sex (well, marriage and children)– Schooling
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Policies and Changes• Policies change all the time
– Why I will leave to others– Impact of policies often unforeseen
• at least by bureaucrats, politicians and voters
• Examples– Urban development policy and sprawl
• TODAY: post-WWII land reform
– Large store and liquor license laws• TODAY: convenience stores and shopping centers
– Finance: end of “sarakin”
– Trucking: Kuroneko (Yamato Takkyu-bin)
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Technological change
• Largely exogenous– But cell phones interact with policy
• cell phone shopping unique to Japan?– I’m too old to be sure!
• Lots of conveniences– Aggregate impact: save time!
• Household tasks• Food preparation
– TODAY: instant ramen, freezers
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Induced change
• Institutions have lots of momentum– Interlocking patterns of behavior– Lots of truth in “1945 System” approach
• Need large shock to shift– But can have erosion around the margins
• TODAY: Large firm labor relations
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“Lifetime” employment system
• Better labeled:– Internal labor markets with– Mandatory retirement
• Rational response to growth, human capital• Common in the US in various periods / industries• End result a “Ponzi” or pyramid scheme ( ねずみ講 )
– Slow growth eroded the bottom of the pyramid
• Not sustainable!– But how (and when) give way?
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LES: incremental change
• Lowering the costs– Flattening of wage profiles– Accelerating attrition
• Early retirement systems– Mado-giwa zoku (“window sitters”)
• Shukko
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LES: incremental change
• Shrinking the firm– Employing women
• Who used to quit
– Employing part-time and temporary workers
• Outside the pyramid altogether
– Employing subcontractors
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LES: fundamental change
• Job-based pay– Very mixed in practice– In pure form, age independent
• Job markets & mobility– Logical counterpart– No penalty to hiring older workers
• Or encouraging younger to leave
• Long-run implication: external careers– Very partial at present
• But big rise in “professions” and certifications
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Will “LES” disappear?
• Always a minority of labor force– In early years, small business 2/3rds of LF!
• Gradual erosion at the margin– 40+ years of decline
• But no “revolution”– No substitute conceptualization– How both workers and employers phrase
• Even if the phrasing doesn’t match the reality!
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Sum
• Finding typologies of change is hard• Without typologies, “major” and “minor”
change is in the eye of the beholder• Even without that framework I argue:
– Demographics– The retail revolution (including new goods)– Suburbanization and motorization
• All combine to make Japan rather different!
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Consumer Durable Diffusion
0.0
10.0
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30.0
40.0
50.0
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100.0
82 84 86 88 90 92 94 96 982000 2002 2004 2006
Bed
Car
Microwave
Clothes dryer
Air conditioner
Computer
Unit Kitchen
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0.0%
1.0%
2.0%
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197419751976197719781979198019811982198319841985198619871988198919901991199219931994199519961997199819992000200020012002200320042005
rice Bread noodles
1986
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0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
197819791980198119821983198419851986198719881989199019911992199319941995199619971998199920002000200120022003200420052006
Rice Bread Noodles
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Calories / Nutrition Surveydefinitions changed in 2001
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2004200320022001200019991998199719961995199419931992199119901989198819871986198519841983198219811980197919781977197619751970196519601950
Rice Products Wheat products Grains, all types Potatoes
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Passenger Car Ownership, Chiba City
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Total Regular Small Kei Commercial (cargo) vehicles
Total up 80%
Small cars -2%
Trucks -22%
Full-sized cars up 16x!!
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Announced 2007 store openings floor space large store law registrations2006.01 none -2006.02 none -2006.04 6 stores total 88,395 22006.05 43 stores total 349,706 82006.06 46 stores total 293,098 72006.07 46 stores total 259,691 102006.08 65 stores total 283,641 22006.09 49 stores total 293,001 22006.10 47 stores total 356,863 102006.12 62 stores total 282,651 72007.01 59 stores total 340,085 72007.02 68 new stores 297,825 82007.03 88 new stores 458,101 13
579 3,303,057 76 22over 10,000 over 30,000