Productivity and Wages of Firms Using COVID-19-related Support Policies

Author Name MORIKAWA Masayuki (President and CRO, RIETI)
Creation Date/NO. August 2022 22-P-021
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This study uses original firm survey data on the use of support policies related to the COVID-19 pandemic linked with government statistics on Japanese firms and documents supported firms’ productivity and wages before the COVID-19 pandemic. The results indicate that the firms that used support policies had lower productivity and wages long before the pandemic as compared to the firms that did not. Firms that used multiple policy measures and those that repeatedly used support policies tended to show additionally lower performance. The results suggest that firm support policies may have the side effect of preserving inherently inefficient firms and that such a problem may increase in severity as support policies become prolonged.

This is the English version of the Japanese Policy Discussion Paper (22-P-002) with some additional information and changes.

Published: Morikawa, Masayuki, 2023. "Productivity and wages of firms using COVID-19-related support policies," Social Science Quarterly, Volume104, Issue3 (2023), 202-213.