Global forces, local adjustments: The politics of labor market deregulation in contemporary Japan and Korea

This dissertation investigates the political and economic conditions under which specific types of market reforms take place, focusing on the politics of labor market deregulation in Japan and Korea during the period from the late-1980s to 2007. Why do some countries opt for drastic and extensive labor market deregulation with intense political confrontation, while others favor incremental and compensating regulatory approaches through a cross-class alliance? In this study, I argue that institutional complementarities among skills training systems, wage coordination institutions, and political mechanisms affect variations in the political responses and policy outcomes of labor market deregulation.;Coherent institutional complementarities among specific skills training systems, disciplined wage coordination institutions, and consensual political mechanisms lead to selective labor market deregulation, which is designed to protect the key institutional pillars of the model of a coordinated labor market. This corresponds to the politics of labor market deregulation in Japan. In contrast, incoherent institutional complementarities among less institutionalized skills training systems, underdeveloped wage coordination institutions, and centralized political mechanisms facilitate the disintegration of a coordinated labor market, pressuring policymakers and employers to adopt radical and sweeping labor market deregulation policies. This is the story of the politics of labor market deregulation in Korea.;The linkage between skills training systems and wage coordination institutions in the labor market shapes economic interests and policy positions of large employers and skilled workers for labor market deregulation. When the configurations of political mechanisms are designed to protect pertinent political and economic interests in the labor market, the politics of labor market deregulation would result in the reinforcement of the institutional arrangements of the labor market with incremental adaptations. Otherwise, labor market deregulation would lead to the disintegration of an institutional equilibrium of the labor model when a country faces political and economic challenges. In other words, the institutional arrangements of consensual and centralized policymaking mechanisms would either reinforce the system of a coordinated market economy or accelerate the disintegration of a coordinated market economy in economic distress.