Trade unions - Japanese unions at work

The Japanese labor market has worked quite well over recent decades, whereas the European economies have produced more and more unemployment. A popular hypothesis is that this difference can be attributed to unions. While, in Europe, unions are strong and centralized and do not care about the individual firm, the Japanese unions are enterprise unions which deal directly with and understand the local management. Employers in Japan in turn consult unions and employees on all relevant management decisions. This corporatism finally ensures that workers are more motivated and have a higher productivity. It is the central conjecture that the presence of unions increases the voice of the employees signficantly. By using innovative new firm data, it is shown that this is actually the case. Hence, Japanese enterprise union are not harmful, but foster information sharing and contribute to the performance of the enterprise.