APPENDIX: Japan’s Unemployment Rate
Japan’s low unemployment rate has often been dismissed as a statistical artifact, with references to an unusually liberal definition of employment, and restrictive definition of unemployment. Although potentially significant differences in unemployment rates in Japan and other developed economies do arise from differences in economic structure and behavior, differences arising from methodological approaches in defining and measuring unemployment rates are of secondary importance.
I to (1984) compared the United States and Japanese definitions of unemployment, finding that these differences have only a minor effect on measured unemployment rates. 1/ Instead, he concluded that at least half of the difference in measured unemployment rates was attributed to differences in economic structure. Most importantly, he found that 20-25 percent of the difference was due to low participation rates of teenagers in Japan relative to the United States. Differences in layoff practices and the relative shares of the agricultural sector (which are largely self- or family-employed and therefore free from measured unemployment), also accounted for a significant share of the difference. Ito (1992) again concluded that statistical definitions in the United States and Japan did not explain the gap in measured unemployment rates.
Hashimoto (1993) examined the role that kyogyosha, or those not at work, played in Japan’s low measured unemployment rate. These individuals are counted as employed, as they are kept on firms’ payrolls and receive wages or salaries. A portion of the workers that are temporarily not at work (ichiji kyogyosha, which corresponds to temporary layoffs in the United States) are also classified as employed in Japan, while they would be unemployed in the United States. He found some evidence that the share of kyogyosha in the population varies inversely with the business cycle. Although data limitations do not allow for a separation of temporarily and permanently not at work, the total number of kyogyosha could be used as an upper bound for the former, which would allow for an adjustment in Japan’s unemployment rate to compare it with that in the United States. Hashimoto concluded that such an adjustment would reduce the gap between the two official rates in 1988 by 43 percent (during which the United States, unemployment rate was 5.5 percent, while Japan’s official rate of 2.5 percent, and its adjusted rate was 3.8 percent). However, given the Japanese preference for adjusting hours worked rather than using temporary layoffs, this estimate must be viewed cautiously.
The most comprehensive work undertaken in comparing unemployment rates among developed countries using comparable methodologies has been by conducted by Sorrentino (1984, 1987, 1989, 1993, 1995). In Sorrentino (1984), she adjusted Japanese data using special March surveys to make them comparable with United States classifications, and found that this resulted in an increase in the Japanese unemployment rate by at most 0.4 percentage points, with the male unemployment rates revised downward and female rates revised upward. She also compared broader definitions of unemployment in Japan and the United States. 1/ When the conventional concept of unemployment was augmented to include most part-time workers, or include the latter as well as discouraged workers, she found that the broader measures were increased to a greater degree in Japan than in the United States (i.e., that part-time workers for economic reasons and discouraged workers were proportionately larger in Japan than in the United States). These calculations were updated in Sorrentino (1987, 1989). First, she found that the use of annual special surveys enabling the adjustment of Japanese data for these later years now indicated that the Japanese unemployment rate was slightly lower than the United States rate when placed on a comparable basis, although the differences remained minor. Second, the adjusted female unemployment rates remained higher than their unadjusted counterparts, while adjusted male rates were again lower. Third, part-time jobseekers for economic reasons and discouraged workers continued to be disproportionately present in Japan. In fact, when discouraged workers were included, the Japanese unemployment rate exceeded its United States counterpart during 1985-88. 1/ 2/
In Sorrentino (1993), international comparisons for 1989 were expanded to include a number of other OECD countries, as well as the Japan and the United States. 3/ While Sweden and Japan had the lowest standard unemployment rates, the increase in the rate when including part-time workers for economic reasons and discouraged workers was the highest in Japan, especially for women. These patterns were confirmed in Sorrentino (1995), which compiled data for the period 1983-93, although caution was again advised in interpreting the latter results, given international differences in concepts of discouraged workers. 4/
Finally, the OECD (1995) examined supplementary measures of labor market slack. It found that involuntary part-time work was a more important element of labor market slack in OECD economies with the exception of Japan, where discouraged workers were more important. However, it questioned whether all discouraged workers should be considered as additional labor market slack, finding that, among other reasons, most discouraged workers had been jobless for long periods of time, and that in European countries for which data were available, their numbers exhibited little cyclical variation. Nevertheless, in comparison to many other countries, Japan’s discouraged worker rate was highly correlated with its unemployment rate. Thus, it would appear that this is an aspect of Japan’s labor market that require’s further study. 1/
Abraham, Katherine, and Susan Houseman, “Job Security and Work Force Adjustment: How Different are U.S. and Japanese Practices?,” Journal of the Japanese and International Economies. 3, pp. 500–21, 1989.
Bank of Japan, “Recent Changes in Japan’s Labor Market and Their Impact -Synopsis,” Bank of Japan Special Paper No. 202, May 1991.
Bank of Japan, “Corporate Profits and Restructuring Measures during the Recent Economic Downturn,” Quarterly Bulletin. February 1995b.
Baumgartner, Ulrich, and Guy Meredith (eds.), “Saving Behavior and the Asset Price ‘Bubble’ in Japan: Analytical Studies,” IMF Occasional Paper #124, April 1995.
Bregger, John, and Steven Haugen, “BLS introduces new range of alternative unemployment measures,” Monthly Labor Review. October 1995, pp. 19–26.
Brunello, G., “Reverse seniority rules and the responsiveness of wages and employment to external shocks: A note on the Japanese experience,” The Economics Studies Quarterly, 39(3), pp. 208–215, 1988.
Brunello, G., Kenn Ariga, Yohihiko Nishiyama and Yasushi Ohkusa, “Recent Changes in the Internal Structure of Wages and Employment in Japan,” Journal of the Japanese and International Economies, 9, pp. 105–129, 1995.
Clark, Robert, and Naohiro Ogawa, “Employment Tenure and Earnings Profiles in Japan and the United States: Comment,” American Economic Review. Vol. 82, No. 1, March 1992, pp. 336–345.
Economic Planning Agency, Social and Economic Plan for Structural Reforms: Towards a Vital Economy and Secure Life (Summary). Tokyo, November 29, 1995.
Freeman, Richard, and Martin Weitzman, “Bonuses and Employment in Japan,” Journal of the Japanese and International Economies. 1, pp. 168–194, 1987.
Hashimoto, Masanori, “Aspects of Labor Market Adjustment in Japan,” Journal of Labor Economics. Vol. 11, No. 1, Part 1, January 1993.
Hashimoto, Masanori, and John Raisian, “Employment Tenure and Earnings Profiles in Japan and the United States,” American Economic Review. September 1985, pp. 721–36.
Hashimoto, Masanori, and John Raisian, “Investments in Employer-Employee Attachments by Japanese and U.S. Workers in Firms of Varying Size,” Journal of the Japanese and International Economies. 3, pp. 31–48, 1989.
Hashimoto, Masanori, and John Raisian, “Employment Tenure and Earnings Profiles in Japan and the United States: Reply,” American Economic Review. Vol. 82, No. 1, March 1992, pp. 346–354.
Higuchi, Yoshio, “Japan’s Changing Wage Structure: The Impact of Internal Factors and International Competition,” Journal of the Japanese and International Economies. 3, pp. 480–99, 1989.
Hill, M. Anne, “Female Labor Supply in Japan: Implications of the Informal Sector for Labor Force Participation and Hours of Work,” The Journal of Human Resources, XXIV, 1, pp. 143–161.
Houseman, Susan and Machiko Osawa, “Part-time and temporary employment in Japan,” Monthly Labor Review. October 1995, pp. 10–18.
Ito, Takatoshi, “Why is the Unemployment Rate so much lower in Japan than in the U.S.?,” Center for Economic Research Discussion Paper. No. 198, University of Minnesota, January 1984.
Mincer, Jacob, and Yoshio Higuchi, “Wage Structures and Labor Turnover in the United States and Japan,” Journal of the Japanese and International Economies. 2, pp. 97–133, 1988.
Ohashi, Isao, “On the Determinants of Bonuses and Basic Wages in Large Japanese Firms,” Journal of the Japanese and International Economies. 3, pp. 451–79, 1989.
Ohkusa, Yasushi, and Souichi Ohta, “An Empirical Study of the Wage-Tenure Profile in Japanese Manufacturing,” Journal of the Japanese and International Economies. 8, pp. 173–203, 1994.
Sakurai, Kojiro, and Toshiaki Tachibanaki, “Estimation of mis-match and U-V analysis in Japan,” Japan and the World Economy. 4, (1992), pp. 319–332.
Sato, Hiroki, “Employment Adjustment of Middle-aged and Older White-collar workers,” Japan Labor Review, February 1, 1994, pp. 5–8.
Sorrentino, Constance, “Adjusted Japanese unemployment rate remains below 3 percent in 1987-88,” Monthly Labor Review. June 1989, pp. 36–38.
Tachibanaki, Toshiaki, and Kojiro Sakurai, “Labor supply and unemployment in Japan,” European Economic Review. 35, 1991, pp. 1575–1587.
Taylor, John, “Differences in Economic Fluctuations in Japan and the United States: The Role of Nominal Rigidities,” Journal of the Japanese and International Economies. 3, pp. 127–144, 1989.
This chapter was prepared by Mark S. Lutz.
See Hashimoto and Raisian (1985), Bank of Japan (1994) and Ito (1992) for good overviews of Japan’s labor market structure and behavior, kurosaka (1989) provides a history of the Japanese labor market in the postwar period.
By age 64, a typical Japanese male has held 4.9 jobs, while an American worker has held 10.9.
Median tenure for firms with 1-9 workers in Japan was 8 years, compared to 2 years for firms with 1-25 workers in the United States, while for firms with more than 1,000 male employees it was 12 years in Japan and 7 years in the United States.
It must be kept in mind, however, that these patterns may be influenced by differences in labor force composition (including age, educational background and industrial mix).
These figures exclude nonself-employed and family workers.
Hashimoto (1993) provides evidence of the emulation by small firms of large firms’ lifetime employment practices.
What has been noticeably left unanswered concerns the participation of female workers in the lifetime employment system. As discussed more fully below, although the proportion of female employment in regular (i.e., not part-time, temporary or daily) nonagricultural employment has risen significantly in the past decade, women continue to be far less represented than men in the lifetime employment system, and shoulder a disproportionate share of the burden in employment adjustment.
The Ministry of Health and Welfare projects that Japan’s total population will peak at about 130 million by about 2010, declining thereafter. The working age population, defined as those between 15 and 64 years of age, peaked in absolute terms in 1994 and is expected to decline as a share of the population from 69.7 percent in 1991 to less than 60 percent by 2020.
See Bank of Japan (1994).
One possible explanation for this pattern could be that demand shocks were anticipated to be of a more temporary nature in Japan than in the United States Hashimoto tests for this by comparing coefficient values in equations using estimates of anticipated and unanticipated shifts in demand. The coefficients for unanticipated demand indicate greater employment response in the United States, and greater inventory response in Japan, with little difference in adjustment in hours worked. While many of the coefficients for employment and hours worked in response to anticipated changes in current and future output were statistically insignificant, Japanese firms continued to significantly adjust inventories.
Among their findings, in response to a 1 percent decline in production, employment in the United States declined by 0.3 percent within one month and by 0.8 percent within 12 months, compared to a 0.02 percent decline within one month and 0.2 percent within 12 months in Japan. While similar differences were found in total production hours worked, average production hours declined in both countries by about 0.2 percent within one month and by only 0.1 percent within 12 months.
Abraham and Houseman (1989), page 514.
Nevertheless, the Bank of Japan (1995a) reports that in 1993, the depth of Japan’s recession, total annual working hours in manufacturing averaged 2,014 in Japan, compared to 2,153 in the United States, 1,857 in the United Kingdom, 1,684 in France, and 1,542 in Germany.
Hashimoto (1993) notes that overtime hours account for a greater share of total hours worked in Japanese manufacturing firms than in the United States, which may result from a smaller overtime premium in Japan (time and a quarter, compared to time and a half in the United States), as well as from the influence of the firm-specific human capital.
The equations regressed quarterly changes in the logs of employment and hours worked on contemporaneous through four lags in the change in the logs of manufacturing industrial production for the manufacturing sector and the same pattern of changes in the logs of real GDP for the overall economy over the 1973-90 period. Time trends were included in both equations. Predictions were then made for the 1991-95 period. This method of estimating employment and hours worked elasticities has also been used by Abraham and Houseman (1989) and Bank of Japan (1994). Hashimoto estimated a similar model using annual data, while Houseman and Osawa (1995) looked at adjustment of part-time workers using quarterly data. The chart contains four-quarter moving averages of the prediction errors to smooth the series and accentuate persistent errors.
The Employment Status Survey is conducted every five years by the Management and Coordination Agency. Part-time workers are separately enumerated, as are arubaito, defined as side jobs taken by someone who is in school or who has regular employment elsewhere. The feature distinguishing part-time workers from other regular employees is not necessarily the number of hours worked, but the set of personnel practices that are applied to them. As discussed below, for example, part-time workers do not participate in the lifetime employment and seniority-based wage system, nor are they generally promoted. The annual Labor Force Survey does not separately track part-time workers, but annual data on the number of nonagricultural employees categorized by number of hours worked are available. Given that some part-time workers in fact work the same number of hours as regular full-time workers, the annual data most likely understate the share of part-time employees in the labor force. The definitions of temporary and daily workers are the same in the two data sources.
See Houseman and Osawa (1995) on differences in definitions and coverage in the Ministry of Labor Survey of Employment Trends and other data sources.
See Hill (1988) for estimates of female labor supply in the Tokyo area.
Of the 95 percentage points accounted for by female part-time employees, women aged 30-39 accounted for 20 percentage points, while those aged 40-49 accounted for 37 percentage points, and aged 50-59 accounted for 22 percentage points. Therefore, women generally wait until their children reach school age before re-entering the labor force.
See Houseman and Osawa (1995) for details of reduced contributions for part-time employees.
They estimated quarterly employment elasticities for regular and temporary manufacturing employees over four quarters, finding significantly higher elasticities for the latter group in all circumstances except the one-month elasticity for men. Hashimoto (1993) provides similar evidence on the differences in employment elasticities for regular versus temporary and day laborers, and for females and males using annual data.
One must, of course, keep in mind that differences in subject specialization influences these differences.
This compares to 23.7 percent of responding firms that reduced or suspended the recruitment of employees in mid-careers, and 20.6 percent that reduced or suspended the recruitment of new school graduates. See Ministry of Labor (1994).
See Blumenthal (1994) for a discussion of inter- and intra-firm employment adjustment. In order to enhance smaller firms’ abilities to engage in inter-firm transfers, and spurred by the yen’s appreciation in the mid-1980s, the Industrial Employment Stabilization Center was established in 1987. It conducts biannual surveys of companies with redundant and insufficient workers, disseminating the results, and thereby facilitating transfer agreements.
See Sato (1994) for a discussion of increasing pressures from excess middle-aged and older workers.
Until recently, Switzerland was able to boast an unemployment rate that was lower than Japan’s. While prior to the 1980s this was in part the result of limited statistical coverage of the unemployed, it has also reflected variations in female participation rates, as in Japan, and In the cyclical supply of foreign labor. See De Masi and Henry (1996).
And these are the data included in the OECD’s standardized unemployment rates.
Since 1991, unemployment rates have risen for all age groups, with the largest increase occurring among workers aged 15-24 years (rising to 6.1 percent in 1996). Unemployment among workers aged 25-34 years and aged 55-64 years have also risen markedly, to 3.7 and 3.8 percent, respectively, in 1995.
Over the 1985-95 period, a simple regression of the unemployment rate on the output gap, lagged two periods, had a adjusted R squared of 90, with a 1 percentage point increase in the output gap resulting in a 0.14 percentage point decrease in the unemployment rate.
The data and estimates in Chart II.9 are for regular employees (excluding temporary and part-time workers) with the trend real unit labor costs derived using a Hodrick-Prescott filter.
While these estimates are somewhat sensitive to the time period examined and method for trend estimation, alternate estimates using total, rather than regular, employment, and adjusting for hours worked provide similar results.
See Jackman, Layard and Pissarides (1989) for a discussion of unemployment/vacancy rate issues in the United Kingdom. For Japan, data on job vacancies are collected via some 600 public employment agency offices, and are compiled by the Ministry of Labor. However, these statistics are thought to cover only about 20 percent of job searches (see Matsuoka and Rose, 1994).
Sakurai and Tachibanaki (1992) provide evidence suggesting that regional and age mismatches account for 17-20 percent of total unemployment over the 1974-86 period. More recently, the Economic Planning Agency’s annual regional economic report concluded that recent industrial hollowing out has been felt most heavily in the regions including Tokyo, Osaka and Nagoya, where subcontractors of large manufacturers tend to be located. Moreover, the report notes that there has been an increase in workers moving to provincial areas from large cities. As to age mismatches, unemployment rates have risen the most for youths aged 15-24, and those aged 55-64. Higuchi (1989) discusses the longer duration of unemployment for senior workers due to a scarcity of reemployment opportunities.
See Kurosaka (1989) for a history of the shunto system, and Taylor (1989) for a comparison of wage flexibility in Japan and the United States. Brunello (1988) and Higuchi (1989) argue that higher labor turnover costs from the seniority-based pay system, especially for older workers, induces greater wage flexibility.
There has been a sizable debate over the role played by Japan’s system of bonus payments. For example, Freeman and Weitzman (1987) have found bonuses to be more cyclical than base wages, arguing that they contain a significant profit-sharing component, which has played a modest role in stabilizing unemployment at relatively low levels. They found that bonuses are also more sensitive to a company’s or industry’s particular circumstances, while base wages are primarily influenced by the overall economy’s performance. Ohashi (1989) argues that work intensity plays a greater role than profits in influencing bonus patterns, and therefore views them in an efficiency wage context. Taylor (1989) discounts the role bonuses play in Japan’s wage flexibility, emphasizing instead the benefits of synchronized annual wage setting.
The recently completed 1996 shunto was also 2.8 percent. These increases appear to be influenced by both inflation and the output gap. A regression of the annual shunto on current and lagged inflation, and on the lagged output gap, with instruments used for current inflation, has an adjusted R squared of 0.92, and a Durbin-Watson statistic of 1.89.
For example, in a Ministry of Labor survey of 4,500 manufacturers with 100 or more employees conducted in early 1996, 25.3 percent of respondents stated that they had reduced their workforces due to increased imports and an expansion in overseas production.
Ono (1989/90) estimates the between 1961 and 1985, the average age of manufacturing workers rose by about nine years, and the proportion of workers over fifty years of age more than doubled, from 7.1 percent to 17.7 percent. Data from the 1995 Labor Force Survey indicate that the share of total employees in the economy over fifty rose from 28.4 percent in 1985, which is much higher than Ono’s figure, to 33.0 percent in 1995. While the absolute levels in the two sources differ, the sharp increase in the share of older workers is clearly apparent. Higuchi (1993) argues that it was Japan’s relatively voung labor force that enabled the lifetime employment system to operate.
See Ohkusa and Ohta (1994) and Higuchi (1989). Recent wage increases for new college and university graduates and for existing workers contained in the shunto also support the flattening of profiles during boom periods, as the former were almost equal to the latter during the bubble period, but have been about 1/4 of the latter during 1992-95.
The Ministry of Health and Welfare projects that the population in their 20s will decline from almost 19 million in 1995 to 14 million in 2010.
Independent announcements have been made by a number of major steel and auto producers, as well as other manufacturers and financial institutions, that they have either adopted or intend to adopt by 1997 merit-based pay for at least a portion of their workforce (generally managers initially).
They also attempt to standardize for the cultural background of workers by examining a sample of Japanese plants in the United States that employ American workers and use Japanese labor policies in recruitment and training. They find that steeper wage-tenure slopes and lower turnover rates place this sample closer to Japanese patterns.
Also in 1987, the Industrial Employment Stabilization Center was founded as a non-profit organization, financed by member trade organizations and supervised by the Ministry of Finance, whose purpose is to facilitate labor transfers using a database collected through twice-yearly surveys of firms redundant and insufficient workers. The center has offices in every prefecture as well the three largest cities in Japan. The scale of the Center’s activities remain small however; in 1995 it handled only 1,165 cases involving 2,709 individuals.
Increases in nonagricultural employment have centered in construction and services, sectors with relatively high shares of temporary and day workers, while manufacturing employment has continued to decline. The Association of Job Journals reports that vacancy advertisements rose 28 percent (year/year) in April 1996, although most of the jobs were part-time. Moreover, although restrictions on temporary placements limit their overall contribution to employment, the Ministry of Labor reported a 70 percent increase in the number of newly opened temporary agencies in the first five months of 1996, compared to the same period of 1995. Finally, the Temporary Work Service Association reported that the number of temporary placements rose by 24 percent in the latter half of 1995 over the same period in the previous year.
It is this stark prospect that motivates the government’s focus on improving productivity in its latest five year plan (EPA, 1995). The plan includes two scenarios, based on whether deregulation and structural reforms are adopted or not, with annual growth projected to average about 3 percent over 1996-2000 with reforms, and only 1 3/4 percent otherwise. See also Feldman (1996) for an analytical examination of implications of demographic projections and productivity gains for living standards in the coming decades.
Two factors contributing to a downward bias in the Japanese unemployment rate were the inclusion of the Self Defense Force as employed in Japan (although the United States did publish an unemployment rate including the armed forces during the 1983-93 period; see Bregger and Haugen (1995)), and the classification of unpaid family workers who worked fewer than 15 hours as employed in Japan (while they were counted as “not in the labor force” in the United States). Ito found, however, that these adjustments raised Japanese unemployment rates by only 0.1-0.2 percentage points.
Ito also compared the definitions of unemployed in the two countries. He found that the definition on unemployed in Japan was stricter by requiring jobseeking activity during the survey week, rather than in the past month as in the United States, thereby biasing down the unemployment rate. On the other hand, the kinds of activities required for jobseeking were broader in Japan, with a resulting upward bias. The overall effect of these biases on the Japanese unemployment rate was therefore an empirical question, which Ito concluded was of relatively minor importance.
The United States Bureau of Labor Statistics compiled data over 1976-93 for alternate measures of labor force underutilization with varying degrees of strictness, labeled U1-U7. These ranged from a long-duration unemployment rate (Ul), generally the most restrictive measure, through the conventional unemployment rate (U5), to the conventional rate including most persons working part-time for economic reasons (U6), and also including discouraged workers (U7). See Sorrentino (1993) for details of the various concepts.
It should be noted that in these two articles, the BLS used a range for discouraged workers in Japan to compare to their United States counterparts, due to differences in survey questions in the two countries, as well as the elusive nature of measuring discouraged worker attachments to the labor force. See the appendix to Sorrentino (1987) for a discussion of this issue.
Tachibanaki and Sakurai (1991) estimate labor supply functions in Japan, focusing on the discouraged worker effect. They find that the unemployment rate would be 46 percent more variable over the 1963-80 period if these effect were absent.
For technical reasons, data for Japan were from 1990.
Calculations of U7, the unemployment rate which includes discouraged workers, was modified for Japan, compared to those presented in Sorrentino (1993), resulting in somewhat lower estimates. See the appendix to Sorrentino (1995).
In addition, internationally comparable data were not compiled by the BLS after 1993 because a redesign of the U.S. Current Population Survey in 1994 resulted in revised questions regarding employment and unemployment activities which did not allow for the earlier adjustments of international data. Most importantly, the BLS’s new alternate measures of unemployment and other forms of labor force underutilization result in sharply lower estimates of persons classified as employed part-time for economic reasons (as respondents were now explicitly asked about their desire and availability for full-time work), and a considerable tightening of the requirements for discouraged worker status (resulting in a 50 percent reduction in this group). See Bregger and Haugen (1995) for a discussion of BLS’s new range of alternative unemployment measures, and how they differ from the old alternate unemployment measures.
In private correspondence with Directors of national statistical agencies, Akihiko Ito, the Director General of Japan’s Statistics Bureau, addressed the issue of discouraged workers in Japan. Under the BLS’s old U1-U7 system, the rate of discouraged workers in Japan was much higher than that in other major developed countries, totaling 2.85 million workers in February 1995. However, the number of discouraged workers varies substantially with the definition for discouragement. Under the new BLS definition, which requires discouraged workers to be able to take a job immediately (while no time dimension had been included before) and to have looked for a job during the past year (which was not previously required), the number of discouraged workers fell to only 330,000, a reduction of a 88 percent, compared to a 50 percent reduction in the United States data. As a result, the United States’ unemployment rate was 5.9 percent in February 1995 (the new U3 rate), while the Japanese rate on a comparable basis was 2.8 percent (with the official rate of 2.9 percent). Were the new definition of discouraged workers included (the new U4 measure), the United States rate would have risen to 6.2 percent, while the Japanese rate would have risen to 3.9 percent. Thus, although the modified unemployment rate rises by a greater percentage in Japan, as it did under the old definition of discouraged workers, indicating that discouraged workers remain a proportionately larger problem in Japan, the level of the unemployment rate remains below its United States counterpart, in contrast to calculations in Sorrentino (1989).