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Negative Supply Shock and Labor Mobility

Author

Listed:
  • Kimiko Terai

    (Keio Economic Observatory, Keio University)

Abstract

*Firms obtain monopsony power by inducing employees to invest in firm-specific human capital. *By committing to seniority-based wage system, the firm can make employees to make high effort in accumulating firm-specific human capital. *The seniority-based wage system reduces labor mobility, which would harm the firm when the firm faces a negative supply shock. *With enhanced portability of corporate pensions and the reform in taxation on retirement benefits, labor mobility can be resumed, which profits the firm and increases production.

Suggested Citation

  • Kimiko Terai, 2022. "Negative Supply Shock and Labor Mobility," Keio-IES Discussion Paper Series 2022-012, Institute for Economics Studies, Keio University.
    • Handle: RePEc:keo:dpaper:2022-012
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    File URL: https://ies.keio.ac.jp/upload/DP2022-012_EN-1.pdf
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    More about this item

    Keywords

    supply shock; retirement benefits; firm-specific human capital; senioritybased wage system; labor mobility;
    All these keywords.

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies
    • J32 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Nonwage Labor Costs and Benefits; Retirement Plans; Private Pensions

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