Presentations

This study analyzes how monopsony power varies over time by establishment size and examines the factors driving these differences. This is because workers in large firms tend to have greater mobility, which expands their labor market beyond the local level and increases alternative employment opportunities. At the same time, workers in small firms that are more regionally constrained may have fewer options, leading to less competitive labor market conditions. To measure monopsony power, wage elasticity was estimated using a Cox model with individual Japanese data from 2017 to 2024. The results indicate that elasticity in small establishments is relatively low, suggesting weaker labor market competition. While wage elasticity remains stagnant in small establishments, it increases in large establishments over time. To identify the driving factors, this study measures the range of employment options using the Outside Options Index. The findings suggest that declining employment opportunities for individuals working in small establishments contribute to their lower wage elasticity. This study contributes to clarifying that small establishments, which tend to have limited monopsony power in product markets, do not necessarily experience similar constraints in labor markets. This further explains part of the existence of wage differentials between establishment sizes. Furthermore, it serves as a preliminary analysis to examine whether teleworking expansion increases competition, compelling small firms to raise wages, or, conversely, whether wage growth occurs in monopsonistic labor markets as labor supply declines in Japan and other advanced economies, as the marginal productivity of labor decreases.

This study investigates the effect of an increase in the industrial requirements for different types of skills and knowledge on the wages of job changers in Japan during the 2000s. It found negative impacts on post-turnover wages for certain types of skills and knowledge. In addition, it confirmed that job changers’ wages increase when they enter a firm in an industry where the required skills and knowledge have increased. Interestingly, the types of required skills and knowledge that threaten workers differ from those that raise post-turnover wages. The findings suggest that politicians should emphasize not only new emerging technologies, but also certain types of knowledge in reskilling policies. Furthermore, the increase in the industrial requirements for basic skills and knowledge and the increase in all types of skills and knowledge of workers do not affect the geographical mobility of job changers. This highlights anew that workers are confined to the same land, leading to lower wages. Given that people do not move easily, measures to boost regional employment are required.

This study demonstrates the regional differences in the epidemic shock on the local labor market and evaluates the spread from the non-tradable sectors damaged by the COVID-19 pandemic to the other sectors. We use the number of job posting data in Japan to demonstrate this difference. This study controls mobility, the monthly average of infected people, and the industrial structure in the pre-pandemic era that determines the local consumption and labor demand. Under such controlled conditions, the diversity of industrial structure measured by the number of establishments positively impacted the number of job postings from April to December in 2020 after the first wave of the COVID-19 pandemic. By contrast, the financial rigidity of the local government negatively impacts the number of job postings. This study examines whether firms consider the human capital resources of the local labor market. However, unlike our expectations, the rate of admissions into universities from high school decreases the number of job postings. The unemployment rate does not affect the job offers. This study examines the Tokyo and Osaka commuting zones between April and December 2020, to investigate where jobs are offered. We find that the surrounding areas of the central cities in the commuting zones recover the number of job posting faster than the central cities. The dramatic increase in the prefectures outside of Tokyo and Osaka commuting zones was not observed from April to December 2020. The pandemic has affected the non-tradable sectors, while the economic crisis affected the tradable sectors such as manufacturing. This study demonstrates that the spread effect from the shock in the non-tradable sectors maybe smaller than that in the tradable sectors.