Wage Structures and Labor Turnover in the U.S. and in JapanThe starting point of this study is the proposition that intensive formation of human capital on the job is the basic proximate reason for the strong degree of worker attachment to the firm in Japan. The greater emphasis on training and retraining, much of it specific to the firm, results also in steeper wage trajectories, due to growth of skills in the firm. We explore this insight more thoroughly by a detailed use of micro-data for the two countries: We measure wage profiles and turnover in age groups, and we test the inverse relation between the two on industry sectors within each of the countries. Using productivity growth indexes for industries in the U.S. and in Japan we test the hypothesis that rapid technical change which induces greater and continuous training, is responsible for steeper profiles, hence indirectly for lesser turnover. The hypothesis is confirmed on the sectoral level in both countries. Finally, we try to standardize for the cultural background of workers, by observing a sample of Japanese plants in the U.S. which employ American workers, and use Japanese labor policies in recruitment and training. We find that the steeper tenure-wage slopes and lower turnover place this sample closer to Japan than to the U.S. |
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1See Table A6 American firms American plants Andrei Shleifer Coefficient of Industry continuous training correlation countries cultural background decline effects of productivity Equations in Japan estimates Fabricated metal firm specific greater growth of wages hiring human capital human capital investments independent variables industrial sectors industries)1 industry dummies Industry Tenure-Wage Slopes interaction variable Jacob Mincer Japanese firms Japanese labor policies Japanese plants Japanese workers job rotation job separation job training JPUS plants labor mobility Lillard low turnover mandatory retirement micro-data monthly separation rates negative Non-Union older workers Panel Study percent level period productivity growth indexes PSID rapid productivity growth recruitment costs rotation sample schooling Separation Equation shown in Table significant steeper tenure-wage profiles Survey Table A2 tenure-wage growth training and retraining turnover rates U.S. and Japan U.S. data U.S. labor markets wage functions wage growth wage profiles wage slopes wage structures Wijnbergen worker skills