Measuring the Gap between Wage and Productivity: Wage-Tenure Profile and Productivity-Tenure Profile Cross Twice

Naomi Kodama and Kazuhiko Odaki ()

No 612, CIS Discussion paper series from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University

Abstract: This paper proposes a new empirical method to measure the gap between wage and productivity of workers. Our method aggregates Mincer-type human capital function of all workers of a firm and obtains the total labor input. We put it into the Cobb-Douglas production function and estimate the coefficients of gap between wage and productivity. Applying the method to employer-employee matched panel data, we find that wagetenure profile and productivity-tenure profile intersect twice. The wage is higher than the productivity in junior years, then surpassed by the productivity in middle age, and becomes higher again in late career. The results are consistent with both of Becker's firm sponsored training model and Lazear's deferred compensation model.

Keywords: Productivity; Human capital; Production function; Wage (search for similar items in EconPapers)
JEL-codes: D24 J24 L23 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2013-12
New Economics Papers: this item is included in nep-eff, nep-hrm and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/26007/cis_dp612.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hit:cisdps:612

Access Statistics for this paper

More papers in CIS Discussion paper series from Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University Contact information at EDIRC.
Bibliographic data for series maintained by Digital Resources Section, Hitotsubashi University Library ().