Research Programs: Human Capital

Economic Analysis of Human Resource Allocation Mechanisms within the Firm: Insider econometrics using HR data

Project Leader/Sub-Leader

OWAN Hideo

OWAN Hideo (Faculty Fellow)



The internal labor market of the firm generally plays broad roles including: (1) evaluating worker ability through actual work output; (2) investing in human capital through on-the-job training; (3) reallocating workers in accordance with human capital accumulation; and (4) motivating workers through both short-term and long-term incentives. Therefore, whether or not a certain personnel system is efficient depends on the firm's employment of rational mechanisms to serve the above multiple roles.

In this project, using personnel records from several Japanese firms, we attempt to answer a number of questions such as: whether the patterns we observe in their internal labor markets are consistent with the theory based on rational firm behavior; whether internal labor markets in Japanese firms, which do not face active external labor markets in general, are any different in their functions from that of their counterparts in Western economies; how institutional factors affect human capital allocation and its pricing; and how changes in worker assignment policy and organizational structure affect innovation activities.

April 15, 2013 - March 31, 2015

Major Research Results


RIETI Discussion Papers


RIETI Discussion Papers