The effect of enterprise unions on employment adjustment speed in Japanese firms

Abstract

Using 20‐year dynamic panel data, we analysed the difference in employment adjustment speed and behaviour between unionized and non‐unionized firms, whether continuous or discontinuous, to investigate the effects of enterprise unions on job security in Japan. We confirmed that unionized firms were more reluctant to downsize and continue to offer stronger job security than non‐unionized firms. However, the unions’ influence on job security has gradually weakened. The primary contribution of this study is its clarification that unions in Japan played the role of guardians of job security under increasing globalization and technological innovation over the 20‐year sample period. Our clarification provides evidence that a different type of union, distinct from those in Western countries aiming for wage increases, is deeply embedded in the Japanese stakeholder system.