Jiyeoun Song's book is an in-depth study of recent labor market reforms in Japan and Korea. She attempts to formulate a new theoretical approach that encompasses the drivers of reform and accounts for the outcomes in a way that is consistent with the observed data. Previous approaches to labor market reform in political economy have primarily focused on the political bargaining aspects, particularly the impact of ideology or electoral system, or the impact of economic crises driving reform. Song's work uses the examples of Japan and Korea to reject these previous approaches and replace them with a new analytical framework for dealing with labor market reform.
The book is a valuable contribution to the literature merely in its choice of case studies. Japan and Korea are both under-researched, and they make for an instructive comparison. They have similar economic systems and structures, mixed with a strongly divergent post-war political history. This, combined with similar approaches to economic growth, means that Japan and Korea lend themselves to a good natural experiment on the impact of institutional factors in labor market reform. Since the mid-1980s both countries have experienced economic disruptions that have led each to pursue labor market reform. While Japan sought to reform the non-regular labor market, Korea attempted wholesale reform for all workers. The fact that both ended up with a highly dualistic outcome is the crux of the problem outlined by Song; her argument focusses on the fact that two similar economies approached labor market reform in two very different ways and arrived at similar outcomes. For Song it comes down to differences in the institutional arrangement prior to the reform attempts, and she builds her theoretical approach around this.
Song's theoretical framework rests on the different institutional aspects of the existing labor markets in Japan and Korea. For Song, these institutional aspects determine the political dynamics of any labor market reform. Where there are strong institutionalized employment protections, as in Japan, there is a high propensity for a coalition to form of policy-makers, employers, and significant sections of the workforce, in order to direct reform in a way that is most beneficial to them. Within this context, that results in a reform program that protects this group, which Song refers to as insiders, while weakening the position of the remaining labor force such as part-time or contract workers, Song's outsiders. In weaker institutional settings, such as Korea, this coalition does not form, since there is no coordination between the players, and the results are more broad-based reform efforts. Song inserts a corollary though: strong labor unions can impede this broad-based reform and indirectly support a similar dualistic outcome. Thus, Song illustrates how two divergent policies can arrive at similar outcomes due to institutional constraints.
This is a strongly grounded theoretical framework, which lends itself well to the cases presented by Song. She deftly applies her newly constructed analytical lens to the cases of Japan and Korea, illustrating the impact that institutionalization and labor relations have on the reform process. Her case-study assessment is strong and informative; built on significant field work, it contributes new insights into the reform processes of both countries and the outcomes they experienced. In this sense, the book is quite powerful, and excels as a localized study of labor market reform. Song's attempt to generalize her framework is more problematic. Her efforts to illustrate the broad applicability of her new framework produces mixed results. She applies the analysis to both Germany and the United Kingdom, but her conclusions are not as convincing. These applications lack the power and clear explanatory links of her use of Japan and Korea, and it is difficult to see her analysis working for other more dissimilar countries. This draws into question the broad applicability of her institutional analysis and causes problems for her assertion that it can provide a strong foundation for a new analytical direction. Indeed, the framework may have benefited from a more generalizable bargaining model, with institutional effects factored into the agents’ decision processes. This would have grounded it in a generalizable way and perhaps allowed for stronger links with other cases. Instead it seems tailored to the cases presented with a reach for generalizability as secondary.
The case analysis is the fundamental strength of the book. Song's expertise in the labor market relations of the region she studies is apparent throughout, and she offers an informative and instructive account of the experiences of Japan and Korea. Overall, Song's book is a fundamental contribution to the body of literature on labor markets in Japan and Korea, and it offers an interesting new approach to the most recent reform processes in those two countries. What her approach lacks in generalizability it more than makes up for with its detailed and informative look at the cases presented.
