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The Effect of Employer Tenure on Wages in Japan

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  • Ayaka Nakamura

    (PhD. Student, Graduate School of Economics, Osaka University)

Abstract

We estimate the effects of employer tenure on wages based on the instrumental variable method and by using the Japan Household Panel Survey (JHPS/KHPS) from 2004 to 2014. We cannot reject the hypothesis that employer tenure significantly contributes to the wage growth after correcting for the omitted variable biases due to individuals' unobserved abilities and unobserved matching qualities, while the ordinary least squares estimators imply substantial returns to employer tenure. These results are robust across subsamples and do not depend on the estimation method. We conclude that the return to employer tenure may be less important in Japan than has been specified in previous studies.

Suggested Citation

  • Ayaka Nakamura, 2019. "The Effect of Employer Tenure on Wages in Japan," OSIPP Discussion Paper 19E007, Osaka School of International Public Policy, Osaka University.
    • Handle: RePEc:osp:wpaper:19e007
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    File URL: http://www.osipp.osaka-u.ac.jp/archives/DP/2019/DP2019E007.pdf
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    More about this item

    Keywords

    Human capital; Matching;

    JEL classification:

    • 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
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

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