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Does Probation Lead to Higher Starting Wage? Evidence from Japanese Online Job Ads

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  • Mirka Zvedelikova

Abstract

Firms commonly use probation to evaluate new hires before making long-term commitments. Workers accepting jobs with a high initial risk of dismissal may expect compensation for this risk. Utilizing an original dataset of Japanese online job ads, this study employs propensity score matching and regression analysis to compare wages at the start of employment for jobs without probation and upon probation completion for jobs with probation. The findings reveal no statistically significant difference in starting wages, suggesting that workers are not rewarded for undergoing probation in terms of higher wages at the start of long-term contracts.

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  • Mirka Zvedelikova, 2024. "Does Probation Lead to Higher Starting Wage? Evidence from Japanese Online Job Ads," ISER Discussion Paper 1235, Institute of Social and Economic Research, Osaka University.
    • Handle: RePEc:dpr:wpaper:1235
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    File URL: https://www.iser.osaka-u.ac.jp/library/dp/2024/DP1235.pdf
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    References listed on IDEAS

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    1. Eric J. Brunner & Jennifer Imazeki, 2010. "Probation Length and Teacher Salaries: Does Waiting Pay Off?," ILR Review, Cornell University, ILR School, vol. 64(1), pages 164-180, October.
    2. Pfeifer Christian, 2010. "Work Effort During and After Employment Probation: Evidence from German Personnel Data," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 230(1), pages 77-91, February.
    3. Andrea Ichino & Regina T. Riphahn, 2005. "The Effect of Employment Protection on Worker Effort: Absenteeism During and After Probation," Journal of the European Economic Association, MIT Press, vol. 3(1), pages 120-143, March.
    4. Wang, Ruqu & Weiss, Andrew, 1998. "Probation, layoffs, and wage-tenure profiles: A sorting explanation," Labour Economics, Elsevier, vol. 5(3), pages 359-383, September.
    5. Imbens,Guido W. & Rubin,Donald B., 2015. "Causal Inference for Statistics, Social, and Biomedical Sciences," Cambridge Books, Cambridge University Press, number 9780521885881.
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