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Distribution of Labour Productivity in Japan over the Period 1996–-2006

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  • Fujiwara, Yoshi
  • Iyetomi, Hiroshi
  • Ikeda, Yuichi
  • Souma, Wataru
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    Abstract

    The distribution of labour productivity is investigated by analyzing the longitudinal micro-level data set which contains the detailed financial conditions of large numbers of Japanese companies over the period 1996–-2006. The authors show that the distribution of labour productivity in both the high and low productivity ranges follows a power law distribution. The generalized beta function of the second kind, which asymptotically reproduces a power law function, is applied to explain the distribution of labour productivity. By comparing the power law exponents that characterize high and low productivity ranges, the authors show that for manufacturing industries, inequality in the low productivity range is larger than that in the high productivity range. For the manufacturing industries, the authors also clarify that the change of inequality in the low productivity range has strong correlation with GDP. In addition, by comparing the power law exponents of the high productivity range in the manufacturing and non-manufacturing industries, the authors show that the inequality of the non-manufacturing industry is higher than that of the manufacturing industry. --

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    File URL: http://dx.doi.org/10.5018/economics-ejournal.ja.2009-14
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    Bibliographic Info

    Article provided by Kiel Institute for the World Economy in its journal Economics: The Open-Access, Open-Assessment E-Journal.

    Volume (Year): 3 (2009)
    Issue (Month): 14 ()
    Pages: 1-14

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    Handle: RePEc:zbw:ifweej:7600

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    Keywords: Labour productivity; marginal productivity; power law distribution; inequality;

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    References

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    1. Hart, P E & Shipman, A, 1992. "The Variation of Productivity within British and German Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 40(4), pages 417-25, December.
    2. Green, Alison & Mayes, David, 1991. "Technical Inefficiency in Manufacturing Industries," Economic Journal, Royal Economic Society, vol. 101(406), pages 523-38, May.
    3. Giulia Faggio & Kjell Salvanes & John Van Reenen, 2007. "The Evolution of Inequality in Productivity and Wages: Panel Data Evidence," CEP Discussion Papers dp0821, Centre for Economic Performance, LSE.
    4. Aw, Bee Yan & Chen, Xiaomin & Roberts, Mark J., 2001. "Firm-level evidence on productivity differentials and turnover in Taiwanese manufacturing," Journal of Development Economics, Elsevier, vol. 66(1), pages 51-86, October.
    5. C. Mirjam van Praag & Peter H. Versloot, 2007. "What is the Value of Entrepreneurship? A Review of Recent Research," Tinbergen Institute Discussion Papers 07-066/3, Tinbergen Institute.
    6. MORIKAWA Masayuki, 2008. "What Do Japanese Unions Do for Productivity?: An Empirical Analysis Using Firm-Level Data," Discussion papers 08027, Research Institute of Economy, Trade and Industry (RIETI).
    7. Mark Doms & Eric J. Bartelsman, 2000. "Understanding Productivity: Lessons from Longitudinal Microdata," Journal of Economic Literature, American Economic Association, vol. 38(3), pages 569-594, September.
    8. n/a, 2004. "Accounting for Background Variables in Stochastic Frontier Analysis," NIESR Discussion Papers 103, National Institute of Economic and Social Research.
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