4.2 Japan has traditionally had an employment system characterized by a lifetime employment relationship between employer and

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4.2 Japan has traditionally had an employment system characterized by a “lifetime” employment relationship between employer and employee and salaries that are based on length of service with the employer—starting low, rising quickly after age 50, and featuring (in addition to a pension) a retirement bonus equal to 3 years of salary. One recent news article on this system stated, “From the perspective of individual incentives, responsibility and performance, it is inefficient and unfair; exceptional work is unrewarded.” Use economic theory to comment on this quotation.

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Principles Of Microeconomics

ISBN: 9789813107342

12th Global Edition

Authors: Karl E. Case, Sharon E. Oster, Ray C. Fair

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