The Role of Firms in Welfare Provision

Toshiaki Tachibanaki

in Labor Markets and Firm Benefit Policies in Japan and the United States

Published by University of Chicago Press

Published in print October 2003 | ISBN: 9780226620947
Published online February 2013 | e-ISBN: 9780226620954 | DOI:
The Role of Firms in Welfare Provision

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This chapter discusses the ways firms support welfare benefit programs in Japan, and how this role might evolve in the future. There are basically four important components of firms' contributions to welfare. The first is statutory contributions to social security, which account for about 50 percent of nonwage labor payments. The second is nonstatutory fringe benefits. The third is retirement allowances (or severance payments). The residual fourth is the sum of payments toward real goods, expenditures on education and training for employees, hiring costs, and so forth. The chapter proposes that firms in Japan can withdraw from welfare provision. The concrete method is as follows: firstly, a transformation of nonstatutory fringe benefits to wage payments; secondly, a withdrawal of firms' statutory social security contributions; and, finally, an introduction of a progressive expenditure tax to compensate for such a withdrawal.

Keywords: welfare benefit programs; Japanese firms; social security; social insurance; employer contributions

Chapter.  8779 words.  Illustrated.

Subjects: Business and Management

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