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Does Firm Size Effect Wages and Labor productivity? -Micro data analysis in case of Japan-

Author

Listed:
  • Ai Oku

    (Chief Economist, Policy Research Institute)

  • Shun Inoue

    (Researcher, Policy Research Institute)

  • Tsubasa Masui

    (Officer, Policy Research Institute)

Abstract

This paper analyzes the relationship of gfirm size and wages h and gfirm size and labor productivity h by using micro data of Financial Statements Statistics of Corporations by Industry FY2018. We find that 1) in the manufacturing sector, the larger the firm is, the higher the wages and labor productivity are, 2) in the services sector, especially large firms (250 employees or over), the relationship between gfirm size and wages h and gfirm size and labor productivity h is not as strong as that in the manufacturing sector, 3) in both the manufacturing sector and the services sector, wages and labor productivity have a positive correlation.

Suggested Citation

  • Ai Oku & Shun Inoue & Tsubasa Masui, 2020. "Does Firm Size Effect Wages and Labor productivity? -Micro data analysis in case of Japan-," Discussion papers ron320, Policy Research Institute, Ministry of Finance Japan.
    • Handle: RePEc:mof:wpaper:ron320
    as

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    File URL: http://www.mof.go.jp/pri/research/discussion_paper/ron320.pdf
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    References listed on IDEAS

    as
    1. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
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    3. Isabelle Desnoyers-James & Sara Calligaris & Flavio Calvino, 2019. "DynEmp and MultiProd: Metadata," OECD Science, Technology and Industry Working Papers 2019/03, OECD Publishing.
    4. Brown, Charles & Medoff, James, 1989. "The Employer Size-Wage Effect," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1027-1059, October.
    5. Giuseppe Berlingieri & Sara Calligaris & Chiara Criscuolo, 2018. "The Productivity-Wage Premium: Does Size Still Matter in a Service Economy?," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 328-333, May.
    6. 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.
    7. Erling Barth & James Davis & Richard B. Freeman, 2018. "Augmenting the Human Capital Earnings Equation with Measures of Where People Work," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 71-97.
    8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Firm size; wage; labor productivity; Financial Statements Statistics of Corporations by Industry;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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