The impact of growth and business cycles on Japanese corporate hierarchies

TL;DRAbstract

In chapter 9, we showed that the slope of Japanese wage–tenure profiles declined in recent years, and we explained this decline by the slowdown in economic growth and the ageing of the labor force. In this chapter we show that the slowdown in economic growth has also been a key factor behind the long-run changes in relative wages by rank, spans of control, and promotion rates described in chapter 8. These changes can be summarized as follows: during the past 20 years, relative wages and spans of control have declined, whereas promotion rates have shown large fluctuations around a negative trend.

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