Separation Risk and Firm Size-Earnings Relationships in Japan and the US

Posted: 27 May 2013

See all articles by Dick Beason

Dick Beason

University of Alberta - Department of Marketing, Business Economics & Law

Date Written: September 1, 1999

Abstract

Separations among workers in large Japanese firms, while rare until recently are quite costly. Such workers must re-enter another firm at a relatively low level along the tenure-earnings profile, or move to a smaller firm where the tenure-earnings profile is much flatter. In either case, in relative terms, separations are very costly to workers in large firms, and such workers must be differentially compensated for the risk of separation. The results here show that compensation for such separation risk is an important factor in the firm size-earnings differential in Japan, but not in the US.

Keywords: Separation risk, Firm size-earnings, US, Japan

Suggested Citation

Beason, Dick, Separation Risk and Firm Size-Earnings Relationships in Japan and the US (September 1, 1999). Japan and the World Economy, Vol. 12, No. 3, 2000, University of Alberta School of Business Research Paper No. 2013-321, Available at SSRN: https://ssrn.com/abstract=2269993

Dick Beason (Contact Author)

University of Alberta - Department of Marketing, Business Economics & Law ( email )

Edmonton, Alberta T6G 2R6
Canada

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