Japanese productivity: adapting to changing comparative advantage in the face of lifetime employment commitments

This article examines one of the possible sources of Japan's productivity growth--industrial policy. The policy actively encourages the transfer of resources, including labor, out of what are considered to be declining industries and sectors, and into industries and sectors considered to be expanding. At the same time, job security is guaranteed for a significant proportion of the labor force, and the article seeks to explain how Japanese "lifetime employment" can be maintained in the presence of the country's industrial policy.