IDEAS home Printed from https://ideas.repec.org/p/dpr/wpaper/1045.html
   My bibliography  Save this paper

Wage Inequality during the Long-term Stagnation in Japan: Changes within and between Establishments

Author

Listed:
  • Mika Akesaka
  • Koyo Miyoshi

Abstract

Wage inequality between individuals has changed little in Japan in recent times unlike in other developed countries. We examine changes in wage inequality within and between establishments during the prolonged stagnation period in Japan. Using a micro-level worker–establishment dataset from 1991 to 2012, we find changes in inequality during the 1990s. First, an increase in the variance in the establishment fixed effects expanded men’s between-establishment inequality. Meanwhile, a reduction of returns to tenure decreased men’s within-establishment inequality and thus suppressed rising individual wage inequality. Second, we find a different trend in women’s wage inequality. Between-establishment inequality was larger than that of men in the early 1990s. However, since the structure of wage inequality in men changed significantly, the composition of inequality between men and women has become similar in recent years. Finally, the assortativeness between workers and establishment rose for both sexes.

Suggested Citation

  • Mika Akesaka & Koyo Miyoshi, 2018. "Wage Inequality during the Long-term Stagnation in Japan: Changes within and between Establishments," ISER Discussion Paper 1045, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:1045
    as

    Download full text from publisher

    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2018/DP1045.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Toshiaki Tachibanaki, 2005. "Confronting Income Inequality in Japan: A Comparative Analysis of Causes, Consequences, and Reform," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262201585, December.
    2. Kawaguchi, Daiji & Mori, Yuko, 2016. "Why has wage inequality evolved so differently between Japan and the US? The role of the supply of college-educated workers," Economics of Education Review, Elsevier, vol. 52(C), pages 29-50.
    3. Ryo Kambayashi & Takao Kato, 2017. "Long-Term Employment and Job Security over the Past 25 Years," ILR Review, Cornell University, ILR School, vol. 70(2), pages 359-394, March.
    4. Kenneth R. Troske, 1999. "Evidence On The Employer Size-Wage Premium From Worker-Establishment Matched Data," The Review of Economics and Statistics, MIT Press, vol. 81(1), pages 15-26, February.
    5. Kawaguchi, Daiji & Ueno, Yuko, 2013. "Declining long-term employment in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 28(C), pages 19-36.
    6. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    7. Mincer, Jacob & Higuchi, Yoshio, 1988. "Wage structures and labor turnover in the United States and Japan," Journal of the Japanese and International Economies, Elsevier, vol. 2(2), pages 97-133, June.
    8. Kambayashi, Ryo & Kawaguchi, Daiji & Yamada, Ken, 2013. "Minimum wage in a deflationary economy: The Japanese experience, 1994–2003," Labour Economics, Elsevier, vol. 24(C), pages 264-276.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guilmi, Corrado Di & Fujiwara, Yoshi, 2022. "Dual labor market, financial fragility, and deflation in an agent-based model of the Japanese macroeconomy," Journal of Economic Behavior & Organization, Elsevier, vol. 196(C), pages 346-371.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Inoue, Toshikatsu, 2022. "The effect of aging on the age–wage profile in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 66(C).
    2. Ken Yamada & Daiji Kawaguchi, 2012. "Changing Unchanged Inequality: Higher Education, Youth Population, and the Japan's Seniority Wages," Global COE Hi-Stat Discussion Paper Series gd12-243, Institute of Economic Research, Hitotsubashi University.
    3. Ohta, Souichi, 2019. "Some evidence on the cohort earnings differentials of men in Japan," Japan and the World Economy, Elsevier, vol. 49(C), pages 113-125.
    4. Yokoyama, Izumi & Kodama, Naomi & Higuchi, Yoshio, 2019. "Effects of state-sponsored human capital investment on the selection of training type," Japan and the World Economy, Elsevier, vol. 49(C), pages 40-49.
    5. Masakatsu Okubo, 2015. "Earnings Dynamics and Profile Heterogeneity: Estimates from Japanese Panel Data," The Japanese Economic Review, Japanese Economic Association, vol. 66(1), pages 112-146, March.
    6. Therry Lallemand & François Rycx, 2006. "Establishment Size and the Dipsersion of Wages: Evidence from european Countries," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 52(4), pages 309-336.
    7. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    8. Ryo Kambayashi & Daiji Kawaguchi & Izumi Yokoyama, 2008. "Wage distribution in Japan, 1989–2003," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 41(4), pages 1329-1350, November.
    9. Koh, Youngsun, 2018. "The Evolution of Wage Inequality in Korea," KDI Policy Studies 2018-01, Korea Development Institute (KDI).
    10. Thomas J. Holmes & Matthew F. Mitchell, 2008. "A theory of factor allocation and plant size," RAND Journal of Economics, RAND Corporation, vol. 39(2), pages 329-351, June.
    11. Oshio, Takashi & Umeda, Maki & Fujii, Mayu, 2013. "The association of life satisfaction and self-rated health with income dynamics among male employees in Japan," Japan and the World Economy, Elsevier, vol. 28(C), pages 143-150.
    12. Christopher H. Wheeler, 2007. "Industry localisation and earnings inequality: Evidence from U.S. manufacturing," Papers in Regional Science, Wiley Blackwell, vol. 86(1), pages 77-100, March.
    13. MURATA Keiko & HORI Masahiro, 2019. "Causal Mechanisms of the Decline in Long-term Employment in Japan: Evidence from Long-run Panel Data (Japanese)," Discussion Papers (Japanese) 19028, Research Institute of Economy, Trade and Industry (RIETI).
    14. Kawaguchi, Akira, 2015. "Internal labor markets and gender inequality: Evidence from Japanese micro data, 1990–2009," Journal of the Japanese and International Economies, Elsevier, vol. 38(C), pages 193-213.
    15. Burdin, Gabriel & Kato, Takao, 2021. "Complementarity in Employee Participation Systems: International Evidence," IZA Discussion Papers 14694, Institute of Labor Economics (IZA).
    16. Daiji Kawaguchi & Yuko Mori, 2014. "Winning the race against technology," Bank of Japan Working Paper Series 14-E-5, Bank of Japan.
    17. Dunne, Timothy & Haltiwanger, John & Troske, Kenneth R., 1997. "Technology and jobs: secular changes and cyclical dynamics," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 46(1), pages 107-178, June.
    18. Yokoyama, Izumi & Kodama, Naomi & Higuchi, Yoshio, 2019. "Inequality through wage response to the business cycle–Evidence from the FFL decomposition method," Journal of the Japanese and International Economies, Elsevier, vol. 51(C), pages 87-98.
    19. Ken Yamada & Daiji Kawaguchi, 2015. "The changing and unchanged nature of inequality and seniority in Japan," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 13(1), pages 129-153, March.
    20. Kawaguchi, Daiji & Mori, Yuko, 2016. "Why has wage inequality evolved so differently between Japan and the US? The role of the supply of college-educated workers," Economics of Education Review, Elsevier, vol. 52(C), pages 29-50.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dpr:wpaper:1045. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Librarian (email available below). General contact details of provider: https://edirc.repec.org/data/isosujp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.