ECON-2096EL Chapter Notes - Chapter 7: Return Period, Mandatory Retirement, Permanent Employment
26 Mar 2017
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Various sources such as nakamura and vertinsky mentioned the following chapateristics of employment in large japanese firms: lifetime employment (long job tenure, seniority wages (steep age-wage profiles, unions. In addition, large japanese firms tend to have mandatory retirement. Are the following characteristics linked together by any economic logic: lifetime employment, seniority wages, unions, mandatory retirement. The lazear model from labour economics suggests that these characteristics fit together (the. Mandatory retirement is not directly based on government legislation. It is decided by the employer or by the employer in negotiations with a union representing the employees. Everyday explanations often emphasize that beyond some age as people age further they tend to become less and less productive (the lazear model does not require this assumption) Although the lazear model was not designed to explain employment practices in large japanese firms, it does provide an explanation for why long job tenure, steep age-wage profiles, unions, and mandatory retirement all fit together.
