2019 Fiscal Year Research-status Report
Trade, Wage Inequality and Intra-Firm Bargaining: A Structural Decomposition Analysis
| Project/Area Number |
18K12769
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| Research Institution | Osaka University |
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Principal Investigator |
朱 連明 大阪大学, 社会経済研究所, 准教授 (60770691)
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| Project Period (FY) |
2018-04-01 – 2021-03-31
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| Keywords | 賃金 / 企業従業員マッチングデータ / 留保賃金 / 賃金プレミアム / 企業レベルデータ |
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| Outline of Annual Research Achievements |
We have developed an estimation framework to decompose firm wages into the reservation wages and wage rents. The reservation wage reflects the
external market value and hence the quality of firm workforce, while the wage rent represents the bargaining between firms and workers. Based on the theoretical framework, we use plant-level data and matched employer-employee data to back out the two wage components. We find that wage rent is the main contributor to the total wage rate for skilled and unskilled labor. Given that the reservation wage largely captures workforce composition and wage rent represents the bargaining premium, these results suggest that, in general, a firm's wage rate is not determined by its workers' characteristics (e.g., education, experience), but by bargaining between the firm and workers.
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| Current Status of Research Progress |
Current Status of Research Progress
2: Research has progressed on the whole more than it was originally planned.
Reason
Following the research plan, the theoretical framework on wage decomposition has been built. Based on the framework, we then decompose wages into the two components and found that the estimates using plant-level data and matched employer-employee data are reasonable.
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| Strategy for Future Research Activity |
We aim to study the evolution of reservation wage and wage rent, and explore how the wage components will be affected by trade shocks. A draft will be completed and the results will be disseminated through academic conferences and workshops in Japan and overseas. The draft will then be submitted to an international peer-reviewed journal.
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| Causes of Carryover |
I plan to present the paper at a conference in March 2020, but due to the spread of COVID-19, the conference and the trip was cancelled.
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