Firm age and wage determination: evidence from matched employer–employee data in Japan

Hiroko Okajima, Kazufumi Yugami, Atsushi Morimoto, Shigeharu Okajima and Kenta Nakamura

Applied Economics Letters, 2021, vol. 28, issue 2, 133-136

Abstract: Firm age, a new factor underlying wage differentials, has been analysed in the emerging literature using matched employer–employee data, though its effect on wages remains inconclusive. This study adds to the literature by providing insights into different wage determinants between industries. We find firm age has a negative effect on wages and a positive effect on a slope of the wage–tenure profile, particularly in non-manufacturing industries. The industrial difference may be explained by the difference in firms’ survival rates and expectations on long-term training.

Date: 2021
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DOI: 10.1080/13504851.2020.1738324

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