|Author Name||ARAKI Shota (Hitotsubashi University) /KATO Takao (Colgate University) /KAWAGUCHI Daiji (Faculty Fellow, RIETI) /OWAN Hideo (Faculty Fellow, RIETI)
|Creation Date/NO.||April 2013 13-E-029|
|Research Project||Economic Analysis of Human Resource Allocation Mechanisms Within the Firm: Insider econometrics using HR data
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|Notes||Revised: December 2013|
This paper provides econometric evidence on the cohort size effect in promotion and pay using detailed personnel records of all workers who joined two large manufacturers in Japan during the period 1991-2010. We find that entering the labor market when the economy is in a bad year and joining firms with fewer colleagues increase the probability of promotion and pay. Our finding implies that the cohort can be a reasonable proxy for the contestant pool.