• Journal of Labour Economics
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• v.26 no.2
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• pp.61-95
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• 2003

This paper investigates the characteristics of Japanese vocational education and training(VET) system and its recent changes with regard to the labour market changes under the long-term economic depression. The employment system model of Marsden(1999) is used as an analytical framework. By the review of 'the debate of intellectual skill', it is pointed out that the fundamental characteristic of Japanese VET system lies in forming multi-functional workers by the internal promotion in connection with the OJT-focused enterprise training along the job-competency rank system. In this system 'the skill as work-competency' is not institutionalised. By the long-term depression this type of internal labour market (ILM) has been under serious changes. By the policy analyses it is made clear that the direction of its change is not toward the collapse of the ILM. A series of labor market and VET policies does aim at sustaining the ILM by the introduction of the unified job qualification system, which is expected to institutionalise the widening external labour market into the craft-based labour market.