ional, fully-fledged pension and welfare system less essential รป even for small firm employees, as we will see shortly. Pension payments remained comparatively low, and were thought to supplement after-retirement income of an employee, either through working in a small firm or using up his lifetime savings, rather than be the sole source of income. The system of lifetime employment also greatly reduced the need for a comprehensive unemployment insurance system. Only in 1973 did the government begin to tackle the dicey issue of building a social security system, though initial efforts were soon thwarted by the 1973 oil shock. Pension payouts and the general welfare system in Japan remain comparatively limited to this date.
For households, the social contract tradeoff was social stability at the price of low real incomes (low returns on savings, low wages, and high prices). Stable employment for a growing portion of the workforce led to increasing income certainty and good education, and with continuous high growth ra
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