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WORKFORCE COMPOSITION AND FIRM PRODUCTIVITY: EVIDENCE FROM TAIWAN

Authors

  • JIN-TAN LIU,

    1. Liu: Professor, Department of Economics, National Taiwan University, 21 Hsu-Chow Road, Tapei (100), Taiwan, and NBER
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  • MENG-WEN TSOU,

    1. Tsou: Professor, Department of International Trade, Tamkang University, 151 Ying-Chuan Road, Tamsui, Tapei County (251), Taiwan, and Institute of Industrial Economics, National Central University, 300 Jhongda Road, Jhongli City, Taoyuan County (320), Taiwain
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  • PING WANG

    1. Wang: Seigle Family Distinguished Professor, Department of Economics, Washington University, Campus Box 1208, One Brookings Drive, St Louis, MO 63130. Phone 1-314-935-5632, Fax 1-314-935-4156, E-mail: pingwang@wustl.edu.
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    • *

      Part of this paper was completed while the first author was visiting Harvard University and the third author visiting Academia Sinica. We have benefited from valuable comments and suggestions by John Ham, Cliff Huang, Cheng Hsiao, and Tong Li, participants of the International Conference on Productivity Analysis held in Taipei, as well as three anonymous referees. Needless to say, the usual disclaimer applies.


Abstract

We study the relationship between workforce composition and firm productivity based on a new employee-employer-matched data set, using an array of workforce characteristics and three alternative measures of firm productivity. While firm age is not essential for the performance of firms, those of smaller size and those in the steel and transportation industries outperform others. Moreover, labor quality, particularly the middle-aged with higher education, contributes significantly to firms' productivity. Furthermore, economic incentives and market competition both play important roles in the performance of firms. Finally, there is an employer-size premium with larger firms paying higher wages and nonwage benefits. (JEL C33, D20, J30)

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