IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/24032.html

Rise in Wage Inequality between Firms: Evidence from Japan 1995-2013

Author

Listed:
  • Ryo KAMBAYASHI
  • Satoshi TANAKA
  • Shintaro YAMAGUCHI

Abstract

Using firm employer-employee matched data, we document changes in wage inequality in Japan from 1995 to 2013. We find that between-firm logwage variance rose and led to the rise in the overall logwage variance for male full-time workers, while within-firm logwage variance remain unchanged. The rise of between-firm variance is driven by changes in returns based on firms’ technology and other characteristics, firm fixed effects, and the entry and exit of firms. By contrast, changes in the distribution of observed firm characteristics and returns to human capital had little effect on the between-firm logwage variance.

Suggested Citation

  • Ryo KAMBAYASHI & Satoshi TANAKA & Shintaro YAMAGUCHI, 2024. "Rise in Wage Inequality between Firms: Evidence from Japan 1995-2013," Discussion papers 24032, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:24032
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/24e032.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Erling Barth & Alex Bryson & James C. Davis & Richard Freeman, 2016. "It's Where You Work: Increases in the Dispersion of Earnings across Establishments and Individuals in the United States," Journal of Labor Economics, University of Chicago Press, vol. 34(S2), pages 67-97.
    Full references (including those not matched with items on IDEAS)

    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. da Silveira, Jaylson Jair & Lima, Gilberto Tadeu, 2021. "Wage inequality as a source of endogenous macroeconomic fluctuations," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 35-52.
    2. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    3. Reizer, Balázs, 2022. "Employment and Wage Consequences of Flexible Wage Components," Labour Economics, Elsevier, vol. 78(C).
    4. David Card & Ana Rute Cardoso & Joerg Heining & Patrick Kline, 2018. "Firms and Labor Market Inequality: Evidence and Some Theory," Journal of Labor Economics, University of Chicago Press, vol. 36(S1), pages 13-70.
    5. Wenjing Duan & Pedro S. Martins, 2022. "Rent sharing in China: Magnitude, heterogeneity and drivers," British Journal of Industrial Relations, London School of Economics, vol. 60(1), pages 176-219, March.
    6. Pardesi, Mantej, 2024. "Productivity convergence and firm’s training strategy," ROA Research Memorandum 003, Maastricht University, Research Centre for Education and the Labour Market (ROA).
    7. Philippe Aghion & Antonin Bergeaud & Richard Blundell & Rachel Griffith, 2019. "The Innovation Premium to Soft Skills in Low-Skilled Occupations," Working papers 739, Banque de France.
    8. Simon Jäger & Benjamin Schoefer & Samuel Young & Josef Zweimüller, 2020. "Wages and the Value of Nonemployment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 135(4), pages 1905-1963.
    9. Thomas Amossé & Alex Bryson & John Forth & Héloïse Petit, 2025. "The micro‐foundations of employment systems: An empirical case study of Britain and France," British Journal of Industrial Relations, London School of Economics, vol. 63(1), pages 3-29, March.
    10. Eunbi Kim, 2021. "The Local Labor Market Effects of Korean Automotive Investments in the United States," International Regional Science Review, , vol. 44(6), pages 619-646, November.
    11. Cortes, Matias & Lerche, Adrian & Schönberg, Uta & Tschopp, Jeanne, 2023. "Technological Change, Firm Heterogeneity and Wage Inequality," IZA Discussion Papers 16070, IZA Network @ LISER.
    12. Lark, Olga & Videnord, Josefin, 2023. "Do Exporters Import Gender Inequality?," Working Papers 2023:6, Lund University, Department of Economics.
    13. Kaltenberg, Mary & Foster-McGregor, Neil, 2020. "The impact of automation on inequality across Europe," MERIT Working Papers 2020-009, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    14. Kory Kroft & Yao Luo & Magne Mogstad & Bradley Setzler, 2025. "Imperfect Competition and Rents in Labor and Product Markets: The Case of the Construction Industry," American Economic Review, American Economic Association, vol. 115(9), pages 2926-2969, September.
    15. Guido Matias Cortes & Jeanne Tschopp, 2019. "Rising Concentration and Wage Inequality," Diskussionsschriften dp1912, Universitaet Bern, Departement Volkswirtschaft.
    16. Wouter Zwysen, 2024. "Working apart: Domestic outsourcing in Europe," European Journal of Industrial Relations, , vol. 30(2), pages 221-241, June.
    17. repec:ehl:lserod:128024 is not listed on IDEAS
    18. Felipe Benguria, 2020. "Firms, Jobs, and Gender Disparities in Top Incomes: Evidence from Brazil," Upjohn Working Papers 20-338, W.E. Upjohn Institute for Employment Research.
    19. Somdeep Chatterjee, 2016. "The role of the firm in worker wage dispersion: an analysis of the Ghanaian manufacturing sector," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 5(1), pages 1-16, December.
    20. Anne‐Sophie Bruno & Nathalie Greenan & Jeremy Tanguy, 2021. "Does the Gender Mix Influence Collective Bargaining on Gender Equality? Evidence from France," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 60(4), pages 479-520, October.
    21. Shubhdeep Deb & Jan Eeckhout & Aseem Patel & Lawrence Warren, 2022. "Market power and wage inequality," IFS Working Papers W22/40, Institute for Fiscal Studies.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:eti:dpaper:24032. 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: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.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.