The distribution of labour productivity is investigated by analyzing the longitudinal micro-level data set which contains detailed financial condition of large numbers of Japanese companies over the period 1996–2006. The generalized beta function of the second kind is applied to explain the distribution. We calculate marginal labour productivity by using the fitting parameters, and show that the economy in the labour market is not in equilibrium. By comparing parameters characterizing high productivity range and low productivity range, we show that inequality of low productivity range is larger than that of high productivity range. In addition, it is shown that the change of inequality in low productivity has strong correlation with GDP.
Paper submitted to the special issue “Reconstructing Macroeconomics”