| Author Name | KAMBAYASHI Ryo (Faculty Fellow, RIETI) / TANAKA Satoshi (University of Queensland) / YAMAGUCHI Shintaro (University of Tokyo) |
|---|---|
| Creation Date/NO. | March 2024 24-E-032 |
| Research Project | Wage Inequality and Industrial Dynamics |
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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.
