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'Lifetime earnings' in Japan
for the class of 1955
Japan's employment model has been that of Shushin Koyo or "lifetime employment," especially for male college-educated workers.1 Under such a system an individual becomes employed by a firm upon graduation, and remains in its employ until retirement some 33 or more years later. This is an idealized system which applies to perhaps 40 percent of the labor force, and with quite specific exceptions.2 In particular, women and employees in small firms are less well represented. Still, it has remained the model employment relationship and, as such, has dominated Japanese thinking and employer practices.
This article seeks to provide some understanding of earnings in this world of lifetime employment by examining the experience of male college graduates from the class of 1955.3 An ideal analysis would be based upon individual income records and would be done once the age cohort had completed its life cycle of work and had withdrawn from the labor market. No known data source allows completely for the first, and the second would relegate the analysis to the domain of economic history. Lacking more appropriate data, this article focuses upon that representative person, the average individual, as recorded once every 5 years in reports of the Wage Structure Survey (Chingin Kozo Kihon Tokei Chosa).4
This excerpt is from an article published in the April 1984 issue of the Monthly Labor Review. The full text of the article is available in Adobe Acrobat's Portable Document Format (PDF). See How to view a PDF file for more information.
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1 For a recent discussion of lifetime employment, see Robert E. Cole, Work, Mobility and Participation (Berkley, University of California Press, 1979), pp. 11-32.
2 Robert Evans, Jr., The Labor Economies of Japan and the United States (New York, Praeger Publishers, 1971), p. 39.
3 Although data for a single year are illustrative, they may be too restrictive. The generation of the Great Depression or the one destroyed in Europe during World War I were each composed of several graduating classes. Even multiple year groupings have problems because of substitution across age classes.
4 The survey has been conducted annually by the Ministry of Labor since 1954. The reports contain data by industry, firm size, education, tenure, and age in 5-year intervals. For the 5-year surveys, 1955, 1960, 1965, 1970, 1975, and 1980, the average age in for those 20 to 24 was a little higher, and the average age for those with less than 6 months of service has been used.
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