WFER 2018, Mexico

Dec 10, 2018

“Severance Payment and Labor Mobility––A Comparative Study of Taiwan and Japan”

Tatsuo Hatta and Shinya Ouchi published “Severance Payment and Labor Mobility––A Comparative Study of Taiwan and Japan” (Hatta, Tatsuo and Ouchi, Shinya Eds.) from Springer.

About this book
This book compares legally allowed dismissal conditions in employment contracts in Taiwan and Japan and then examines the possibility of introducing the Taiwan-style severance payment system into Japanese employment contracts.

A significant difference exists between employment regulations of Japan and Taiwan. In Japan, dismissal of an employee on the grounds of ability is not easily upheld in a court of law, and a set rule for dismissals with severance payment does not exist. On the other hand, in Taiwan, where regulations do not allow dismissal at will, an employee can still be dismissed with severance payment, as long as due process is followed.

Written by labor lawyers and labor economists from both Taiwan and Japan, this book describes the procedures that must be followed in the dismissal process in the two countries. It also shows that this difference in dismissal conditions between the two countries explains the low labor mobility in Japan and high labor mobility in Taiwan, and that this difference in labor mobility, in turn, caused the shift of IT production from Japan to Taiwan in the 1990s. The final chapter of the book elucidates the need for introducing the Taiwan-style severance payment before carrying out further deregulation in Japan.

Jun 21, 2018

AGI WP: “Introducing Severance Payment Systems in Japan —A Proposal for Vacancy Decontrol—”

Hatta presented an AGI working paper Introducing Severance Payment Systems in Japan —A Proposal for Vacancy Decontrol—.

In Japan, the court requires job restoration rather than a severance payment from a firm after it decides that a dismissal has been abusive. This results in a high settlement cost for termination. 

This paper makes two proposals for introducing severance payments to reduce settlement costs in Japan. The first applies to existing contracts and proposes to specify levels of severance payments that would replace the current job restoration requirement after the court determines that a case is abusive. 

The second applies to new employees either for a recently vacated position or a new position and proposes vacancy decontrol, which allows firms to set the levels of severance payments freely while also honoring the existing contracts. Within this category, this paper proposes government-assisted vacancy decontrol, a transitional measure, where the government sets a minimum level of statutory severance payment, which is equal to six months of wages for a worker who has worked for 20 years, following the Taiwan precedent. After the need for the transitional measure is dissolved, complete vacancy decontrol should be introduced, abolishing the statutory severance payment. We have proposed that even at this stage, the government should publicly set a default level of the severance payment, which a firm should observe unless an explicit agreement or contract stipulates otherwise. The government should immediately introduce some form of vacancy decontrol for senior workers who have already retired from a regular job.

Jun 13, 2018

“Competition policy vs. industrial policy as a growth strategy”

Hatta presented a paper “Competition policy vs. industrial policy as a growth strategy” on China Economic Journal.
Hatta, Tatsuo. (2017). Competition policy vs. industrial policy as a growth strategy. China Economic Journal, 10 (2): pp. 162-174.

This paper shows that competition policy, rather than industrial policy, generated the rapid economic growth in post-war Japan. It also reveals that Japan’s growth rate was lowered from the mid-1970s due to newly introduced industrial policies and paucity of further competition policy. The current Abe government recognises the need for competition policies in Japan to recover from the low-growth period. The paper describes the types of competition policy carried out under Abenomics, especially in National Strategic Special Zones.

Abbreviations: METI: Ministry of Economy, Trade, and Industry. NSSZ: National Strategic Special Zones.

Competition policy, industrial policy, growth strategy, trade liberalization, privatization

Mar 26, 2018

“Economic Challenges Facing Japan’s Regional Areas”, Palgrave Macmillan

Hatta published Economic Challenges Facing Japan’s Regional Areas (Tatsuo Hatta Ed.) from Palgrave Macmillan.

About this book
This book analyzes issues related to economic challenges for Japan’s regional revitalization. Japan’s responses to such challenges and to the problem of an aging population are of deep interest to the nations outside of Japan. This book brings together 19 articles contributed by Japan’s leading scholars, originally prepared for an online policy information portal, SPACE NIRA launched by the Nippon Institute for Research Advancement (NIRA) with Dr. Tatsuo Hatta, President of the Asian Growth Research Institute, as its General Editor. This book is a significant and useful reference for all scholars, students, and individuals with an interest in current policy issues in Japan.

Feb 6, 2018

A presentation on the National Strategic Special Zones

Hatta gave a presentation on the National Strategic Special Zones at the American Chamber of Commerce in Japan (ACCJ.)

You can see the presentation material on the next website (my Google Drive):

Recent publications in English