Abstract
Sociologists and economists have long recognized the employment security and corporate loyalty shared by white-collar and blue-collar employees in large firms as a uniquely Japanese institution (Abegglen 1958; Dore 1973; Shirai 1983; Koike 1988). At the same time, many scholars have predicted the demise of so-called Japanese lifetime employment. Cole (1971b) argued that it was not sustainable under high economic growth, as chronic labor shortages would raise employees’ outside options and they would then be tempted to move from one job to another. Beck and Beck (1994) and others predicted that the economic slowdown in the 1990s coupled with the globalization of financial markets would change managerial incentives. Infusion of foreign capital and necessity of rationalization, they argued, would promote American-style personnel practices, such as layoffs, performance pay, and mid-career hiring, and undermine the precarious equilibrium between management and labor.