Is the Tenure-Earning Curve Really Steeper in Japan? A Re-examination Based on UK-Japan Comparison

Empirical, earnings functions stress the relationship between earnings, seniority, labour market experience and education. In modern labour economics, these functions are an important tool for the description of different labour market institutions. In an influential paper, for instance, Hashimoto and Raisian (1985) compare the results from estimates of similar earnings functions in Japan and in the USA and conclude that the labour markets in the two countries differ rather sharply in the relative importance of the accumulation of firm-specific human capital. In particular, they find that ‘growth rates in earnings attributable to tenure are far greater in Japan than in the United States’ (p. 732).