A Microeconomic Analysis of the Declining Labor Share in Japan

Kyoji Fukao, Koji Ito and Cristiano Perugini

No 925, ADBI Working Papers from Asian Development Bank Institute

Abstract: The labor share in Japan has been declining significantly over the last three decades, accompanied by persistent stagnation and an unprecedented increase in economic inequalities. Since these dynamics are likely to be interrelated, understanding the drivers of the labor share might contribute significantly to the Japanese economic and policy debate. Surprisingly, the existing literature on the labor share in Japan is rather limited and confined to country or industry studies. We first attempt to analyze the drivers of the labor share in Japan at the firm level. To this aim, we employ a panel of manufacturing firms from the Basic Survey of Japanese Business Structure and Activities, spanning from 2001 to 2012. By means of panel data estimators, we show how, besides technological variables, firms’ labor share depends significantly on the share of regular workers, on the importance of firms’ international engagement, and on various institutional settings of the product and labor markets.

Keywords: labor share; firm-level analysis; Japan; panel data (search for similar items in EconPapers)
JEL-codes: D33 F61 J30 L11 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2019-02-22
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.adb.org/sites/default/files/publication/487266/adbi-wp925.pdf Full text (application/pdf)

Related works:
Chapter: A Microeconomic Analysis of the Declining Labor Share in Japan (2019)
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:ris:adbiwp:0925

Access Statistics for this paper

More papers in ADBI Working Papers from Asian Development Bank Institute Kasumigaseki Building 8F, 3-2-5, Kasumigaseki, Chiyoda-ku, Tokyo 100-6008, Japan. Contact information at EDIRC.
Bibliographic data for series maintained by ADB Institute ().