An empirical study of the wage-tenure profile in japanese manufacturing

Recently, several studies have clarified that the low separation rate in Japan can be explained by the Japanese steep wage-tenure profile. This paper is an attempt to present the factors responsible for this steep wage-tenure profile. First, we estimate the wage-tenure profile in the manufacturing sector using data from 1961 to 1988. Using our estimated result, we find a positive relationship between the growth factor and the wage-tenure profile. We also find that the wage-tenure profile becomes flatter during a boom. of the two, the growth factor is quantitatively more important than the cyclical factor. The robustness of the results is also confirmed. J. Japan, Int. Econ., June 1994, 8(2), pp. 173-203. Department of Economics, Ritsumeikan University, 56-1, Kitamachi Tohjiin Kita-ku, Kyoto 603, Japan; and Graduate School, Kyoto University, Yoshida-Honmachi, Sakyo-ku, Kyoto 606, Japan, and LSE.