4. International Immigration and Economic Welfare in an Efficiency Wage Model: The Coexistence Case of Both Legal and Illegal Foreign Workers

After the collapse of the so-called bubble economy, the labor market of Japan seems to have been changed drastically. High wages and low unemployment because of the structural shortage of workers, and discussions on various social troubles caused by an increasing number of illegal workers who are attracted by the Japanese economic boom, are things of the past. Now, owing to the serious failure of governmental financial management, the unemployment rate has reached about 5 %, which is the highest since 1955. However, it is remarkable that the high unemployment rate has not prevented the Japanese people from enjoying their relatively established lifestyle. Although individuals have no chance of becoming regular members of a company after graduation, they can gain sufficient wealth to enjoy life by working part time. Some middle-aged workers have been dismissed because of the recent serious depression, but, on the other hand, some younger people voluntarily choose to be unemployed or to support themselves by part-time jobs and wait to obtain much better regular jobs. The phenomenon during the last 2 years of an increasing number of job offers with a constant unemployment rate shows that people in Japan are “luxuriously” particular about their jobs.