1987 Reports

A comparative study of Japanese plants operating in the U.S. and American plants: Recruitment, job training, wage structure and job separation

Higuchi, Yoshio

This study compares recruitment, job training, wage structure, and labor mobility of Japanese plants operating in the U.S. (JPUS plants) with local American owned plants. In the Japanese labor market, the job separation rate is remarkably lower and the wage-tenure profile is steeper than in the United States (see section II). This observation has been interpreted mainly through two theories: the view which stresses the cultural and traditional value of company loyalty, and the perspective which places a strong emphasis on the role of job training. However, studies relying only on international comparisons conclude that it is very difficult to distinguish between cultural and economic related factors. By looking at the JPUS plants (which employ American workers), this analysis strives to separate cultural influences from the influences of technology and production systems. This paper statistically examines the following: (1) whether there are differences in modes of recruitment and job training between the JPUS plants and other American plants, and (2) if so, how these differences influence individual wage growth and job separation rate.