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Measurement of Labor Input in the Productivity Analysis: Insights from Temporary Help Agency Workersʼ Labor Market

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  • Kawaguchi, Daiji

Abstract

To capture labor heterogeneity in productivity analysis, wage is used as a proxy variable for the efficiency unit of labor input. However, the marginal product of labor and wages could systematically diverge depending on the degree of competition in product and labor markets. Along these lines, this study examines the gap between the marginal product of labor, approximated by the fee charged by a temporary help agency, and wages paid to workers, drawn from administrative data compiled by the Temporary Help Agency of Japan. The analysis of establishment-level micro data reveals that the market is concentrated, and the gap between fees and wages is the largest in rural areas. Against several specifications, the estimation results are robust, indicating that people need to pay attention to the degree of market competition in productivity analysis.

Suggested Citation

  • Kawaguchi, Daiji, 2018. "Measurement of Labor Input in the Productivity Analysis: Insights from Temporary Help Agency Workersʼ Labor Market," Economic Review, Hitotsubashi University, vol. 69(4), pages 328-345, October.
    • Handle: RePEc:hit:ecorev:v:69:y:2018:i:4:p:328-345
    DOI: 10.15057/29641
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    Cited by:

    1. Kosuke Aoki & Yoshihiko Hogen & Kosuke Takatomi, 2023. "Price Markups and Wage Setting Behavior of Japanese Firms," Bank of Japan Working Paper Series 23-E-5, Bank of Japan.

    More about this item

    JEL classification:

    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets

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