"This paper examines changes in the Japanese labor market experienced by full-time workers in intermediate age groups (ages 35?50) during the two decades since the collapse of the bubble economy. The results suggest that the opportunity cost of job transfers is lower than it used to be, and that the fluidity of the labor market is also spreading among intermediate-age workers to a certain extent. Moreover, internal competition for promotion to managerial positions may have become more intense at the same time. Specifically, a panel dataset for business establishments was created for this study by linking microdata from the “Basic Survey on Wage Structure” and the “Survey on Employment Trends.” The relationship between rewards for promotion to management and turnover ratios was empirically studied, with the result that a generally positive correlation was found between the two. These changes are consistent with the rank-order-tournament theory, and in that sense, even intermediate age groups, the core of Japanese employment practices, are not entirely unaffected by changes in the structure of the labor market. However, this paper also finds that experience of changes in the labor market is diverse in intermediate age groups, depending on the stage of career advancement and age, that changes in competition for promotion have not spread universally among them, and that it is difficult to explain the whole consistently by using a simple model."

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