Influences of Institutional and Labor Market Characteristics on Careers in Japanese Companies

Abstract

There are two dominant perspectives (namely, the cultural and economic perspectives) that are used to explain aspects of the Japanese employment system such as lifetime employment and the seniority principle. Cultural explanations (e.g., Abegglen; Nakane) tend to rely on Confucianism and familism to explain the Japanese employment system. On the other hand, the theory of the internal labor market is one of the popular theories used to explain the system, shedding light on firm-specific skills (e.g., Aoki; Koike). By using both cultural and economic perspectives, I examine workers' careers in Japanese corporations and then compare the effects of each perspective on the careers. In addition, I perform multi-level analysis (at the national, organizational field, and individual organizational characteristic levels) because individual workers tend to be exposed to multiple institutions although culturalists simply assume that individuals belong to national institutions (e.g., Confucianism) of which the unique employment system is a natural outgrowth. By using the Working Person Survey (2008), I perform logistic, ordinal logistic and OLS regressions. Some of my results show that having general skills has significant effects on the workers' careers and that having firm-specific skills is found to have negative effects on income and on being a regular worker. These results are inconsistent with the past literature and show that the Japanese corporation attaches importance to general skills. Although general skills have positive effects on careers, the workers' age still has a relatively large effect on them.

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