Participatory employment practices in Japan: Past, present and future

In this paper we provide an overview of important aspects of the postwar Japanese experience with employee participation and labor-management cooperation. First we review the scope and nature of participatory employment practices in Japan and their diffusion among Japanese firms over time. We then turn to the evidence on the effects of such practices on company performance. Third we provide some preliminary findings from our most recent research on the responses of participatory employment practices to the economic slowdown in the 1990s and speculate on the future of participatory employment practices in Japan. The paper's key findings include: (i) as a result of favorable environments in the postwar Japanese economy, in particular in manufacturing, participatory employment practices spread widely and were established firmly; (ii) such practices are found to have positive effects on company performance in the long-run; (iii) evidence was found for the complementarities among these practices; and (iv) participatory employment practices appear to be surviving in general in the economic slowdown in the 1990s whereas subtle yet potentially important changes in various attributes of participatory employment practices are taking place