Nakabayashi, Masaki (2011): Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s.
Download (196Kb) | Preview
Schooling, an observable signal, decreases its impact on wages as employers “publicly” learn workers’ hidden types over workers’ experience in the market. This symmetric employer learning hypothesis has been empirically contested by, first, asymmetry of incumbent and entrant employers, and second, larger-than-imagined complementarity between schooling and work experience, which could enshroud learning effect. Microanalysis of Japanese steel industry shows, 1) experience before entering the long-term employment is complementary to schooling, 2) employer learning effect dominates the complementarity effect after workers’ joining the long-term employment. It suggests that reported evidences of employer learning have in fact captured internal labor market effect.
|Item Type:||MPRA Paper|
|Original Title:||Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s|
|Keywords:||employer learning, schooling and wages, internal labor market effect|
|Subjects:||N - Economic History > N3 - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy > N35 - Asia including Middle East
J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure; Wage Differentials
J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J24 - Human Capital; Skills; Occupational Choice; Labor Productivity
|Depositing User:||Masaki Nakabayashi|
|Date Deposited:||06. May 2011 14:10|
|Last Modified:||22. Feb 2013 03:53|
Abe, Yukiko, “A comparison of wage structures in the United States and Japan: Results from cell mean regressions,” The Japanese Economic Review, June 2000, 51 (2), 252–267.
Alexander, Arthur J., “Income, experience, and the structure of internal labor markets,” The Quarterly Journal of Economics, February 1974, 88 (1), 63–85.
Altonji, Joseph G. and Charles R. Pierret, “Learning and statistical discrimination,” The Quarterly Journal of Economics, February 2001, 116 (1), 313–350.
Aoki, Masahiko, Information, incentives, and bargaining in the Japanese economy, Cambridge: Cambridge University Press, 1988.
Arrow, Kenneth, “Higher education as a filter,” Journal of Public Economics, July 1973, 2 (3), 193–216.
Autor, David H., Lawrence F. Katz, and Melissa S. Kearney, “The polarization of the U.S. labor market,” The American Economic Review, May 2006, 96 (2), 189–194.
Baker, George and Bengt Holmstrom, “Internal labor markets: Too many theories, too few facts,” The American Economic Review, May 1995, 85 (2), 255–259.
Baker, George, Michael Gibbs, and Bengt Holmstrom, “The internal economics of the firm: Evidence from personnel data,” The Quarterly Journal of Economics, November 1994a, 109 (4), 881–919. Baker, George, Michael Gibbs, and Bengt Holmstrom, “The wage policy of a firm,” The Quarterly Journal of Economics, November 1994b, 109 (4), 921–955.
Bauer, Thomas K. and John P. Haisken-DeNew, “Employer learning and the returns to schooling,” Labour Economics, May 2001, 8 (2), 161–180.
Bauer, Thomas, Patrick J. Dross, and John P. Haisken-DeNew, “Sheepskin effects in Japan,” International Journal of Manpower, 2005, 26 (4), 320–379.
Beaudry, Paul and John DiNardo, “The effect of implicit contracts on the movement of wages over the business cycle: Evidence from micro data,” The Journal of Political Economy, August 1991, 99 (4), 665–688.
Bedard, Kelly, “Human capital versus signaling models: University access and high school dropouts,” The Journal of Political Economy, August 2001, 109 (4), 749–775.
Belman, Dale and John S. Heywood, “Sheepskin effects in the returns to education: An examination of women and minorities,” The Review of Economics and Statistics, November 1991, 73 (4), 720–724.
Belman, Dale and John S. Heywood, “Sheepskin effects by cohort: Implications of job matching in a signalling model,” Oxford Economic Papers, October 1997, 49 (4), 623–637.
Bitzan, John D., “Do sheepskin effects help explain racial earning differences?,” Economics of Education Review, December 2009, 28 (6), 759–766.
Bollinger, Christopher and Barry T. Hirsch, “Match bias from earnings imputation in the Current Population Survey: The case of imperfect matching,” Journal of Labor Economics, December 2006, 24 (3), 483–519.
Broadberry, S. N., “Technological leadership and productivity leadership in manufacturing since the industrial revolution: Implications for the convergence debate,” The Economic Journal, March 1994, 104 (423), 291–302.
Burdett, Ken and Eric Smith, “The low skill trap,” European Economic Review, September 2002, 46 (8), 1439–1451.
Caponi, Vincenz and Miana Plesca, “Post-secondary education in Canada: Can ability bias explain the earnings gap between college and university graduates?,” Canadian Journal of Economics, July 2009, 42 (3), 1100–1131.
Card, David and Alan B. Krueger, “Does school quality matter?: Returns to education and the characterization of public schools in the United States,” The Journal of Political Economy, February 1992, 100 (1), 1–40.
Chevalier, Arnaud, Colm Harmon, Ian Walker, and Yu Zhu, “Does education raise productivity, or just reflect it?,” The Economic Journal, November 2004, 114 (499), F499– F517.
Chuma, Hiroyuki, “Is Japan’s long-term employment system changing?,” in Isao Ohashi and Toshiaki Tachibanaki, eds., Internal labour markets, incentives and employment, Macmillan Press London 1998, pp. 225–268.
Clark, Melissa A. and David A. Jaeger, “Natives, the foreign-born and high school equivalents: New evidence on the returns to the GED,” Journal of Population Economics, October 2006, 19 (4), 769–793.
Denny, Kevin J. and Colm P. Harmon, “Testing for sheepskin effects in earnings equations: Evidence for five countries,” Applied Economics Letters, September 2001, 8 (9), 635–637.
Doeringer, Peter B. and Michael J. Piore, Internal labor markets and manpower analysis, Lexington, MA: Heath Lexington Books, 1971.
Dohmen, Thomas J., “Performance, seniority, and wages: Formal salary systems and individual earnings profiles,” Labour Economics, December 2004, 11 (6), 741–763.
Fallon, P. R. and P. R. G. Layard, “Capital-skill complementarity, income distribution, and output accounting,” The Journal of Political Economy, April 1975, 83 (2), 279–302.
Farber, Henry S. and Robert Gibbons, “Learning and wage dynamics,” The Quarterly Journal of Economics, November 1996, 111 (4), 1007–1047.
Ferrer, Ana M. and W. Craig Riddell, “The role credentials in the Canadian labour market,” Canadian Journal of Economics, November 2002, 35 (4), 879–905.
Ferrer, Ana M. and W. Craig Riddell, “Education, credentials, and immigrant earnings,” Canadian Journal of Economics, February 2008, 41 (1), 186–216.
Galindo-Rueda, Fernando, “Employer learning and schooling-related statistical discrimination in Britain,” May 2003. Institute for the Study of Labor, Germany, IZA Discussion Paper series, No. 778.
Gathmann, Christina and Uta Schoenberg, “How general is human capital?: A task-based approach,” Journal of Labor Economics, January 2010, 28 (1), 1–49.
Gibbons, Robert and MichaelWaldman, “A theory of wage and promotion dynamics inside firms,” The Quarterly Journal of Economics, November 1999, 114 (4), 1321–1358.
Gibbons, Robert, Lawrence F. Katz, Thomas Lemieux, and Daniel Parent, “Comparative advantage, learning, and sectoral wage determination,” Journal of Labor Economics, October 2005, 23 (4), 681–724.
Godo, Yoshihisa and Yujiro Hayami, “Catching up in education in the economic catch-up of Japan with the United States,” Economic Development and Cultural Change, July 2002, 50 (4), 961–978.
Goldin, Claudia, “America’s graduation from high school: The evolution and spread of secondary schooling in the twentieth century,” The Journal of Economic History, June 1998, 58 (2), 345–374.
Goldin, Claudia, “Egalitarianism and the returns to education during the Great Transformation of American education,” The Journal of Political Economy, December 1999, 107 (s6), S65–S94.
Goldin, Claudia, “The human-capital century and American leadership: Virtues of the past,” The Journal of Economic History, June 2001, 61 (2), 263–292.
Goldin, Claudia and Lawrence F. Katz, “Technology, skill and the wage structure: Insights from the past,” The American Economic Review, May 1996, 86 (2), 252–257.
Goldin, Claudia and Lawrence F. Katz, “The origins of technology-skill complementarity,” The Quarterly Journal of Economics, August 1998, 113 (3), 693–732.
Goldin, Claudia and Robert A. Margo, “The Great Compression: The wage structure in the United States at mid-century,” The Quarterly Journal of Economics, February 1992, 107 (1), 1–34.
Gordon, Andrew, The evolution of labor relations in Japan: Heavy industry, 1853-1955, Cambridge, MA: Council on East Asian Studies, Harvard University, 1985.
Gordon, Robert J., “Why U.S. wage and employment behavior differs from that in Britain and Japan,” The Economic Journal, March 1982, 92 (365), 13–44.
Groot,Wim and Hessel Oosterbeek, “Earning effects of different components of schooling: Human capital versus screening,” The Review of Economics and Statistics, May 1994, 76 (2), 317–321.
Hall, Robert E., “Employment fluctuations and wage rigidity,” The Brookings Papers on Economic Activity, September 1980, (2), 91–124.
Hall, Robert E., “The importance of lifetime jobs in the US economy,” The American Economic Review, September 1982, 72 (4), 716–724.
Hansen, W. Lee, Burton A. Weisbrod, and William T. Scanlon, “Schooling and earnings of low achievers,” The American Economic Review, June 1970, 60 (3), 409–418.
Hashimoto, Masanori and John Raisian, “Employment tenure and earnings profiles in Japan and the United States,” The American Economic Review, September 1985, 75 (4), 721– 735.
Hersch, Joni, “Profiling the new immigrant worker: The effects of skin color and height,” Journal of Labor Economics, April 2008, 26 (2), 345–386.
Heywood, John S., “How widespread are sheepskin returns to education in the U.S.?,” Economics of Education Review, September 1994, 13 (3), 227–234.
Higuchi, Yoshio, “Effects of job training and productivity growth on retention of male and female workers in Japan,” in Toshiaki Tachibanaki, ed., Labour market and economic performance: Europe, Japan and the USA, St. Martin’s Press New York 1994, pp. 155–182.
Hungerford, Thomas and Gary Solon, “Sheepskin effects in the returns to education,” The Review of Economics and Statistics, February 1987, 69 (1), 175–177.
Ishikawa, Tsuneo, Income and wealth, Oxford: Oxford University Press, 2001.
Jaeger, David A. and Marianne E. Page, “Degrees matter: New evidence on sheepskin effects in the returns to education,” The Review of Economics and Statistics, November 1996, 78 (4), 733–740.
Jensen, Robert, “The (perceived) returns to education and the demand for schooling,” The Quarterly Journal of Economics, 2010, 125 (2).
Katz, Lawrence F. and Ana L. Revenga, “Changes in the structure of wages: The United States vs Japan,” Journal of the Japanese and International Economies, December 1989, 3 (4), 522–553.
Kiley, Michael T, “The supply of skilled labour and skill-biased technological progress,” The Economic Journal, October 1999, 109 (458), 708–724.
Kuhn, Peter and Catherine Weinberger, “Leadership skills and wages,” Journal of Labor Economics, July 2005, 23 (3), 395–436.
Lang, Kevin and David Kropp, “Human capital versus sorting: The effects of compulsory attendance laws,” The Quarterly Journal of Economics, August 1987, 101 (3), 609–624.
Lange, Fabian, “The speed of employer learning,” Journal of Labor Economics, January 2007, 25 (1), 1–35.
Layard, Richard and George Psacharopoulos, “The screening hypothesis and the return to education,” The Journal of Political Economy, September-October 1974, 82 (5), 985–998.
Lluis, St´ephanie, “The role of comparative advantage and learning in wage dynamics and intrafirm mobility: Evidence from Germany,” Journal of Labor Economics, October 2005, 23 (4), 725–767.
McGuinnes, S., “Graduate overeducation as a sheepskin effect: Evidence from Northern Ireland,” Applied Economics, March 2003, 35 (5), 597–608.
Marglin, Stephen, “What do bosses do?: The origins and functions of hierarchy in capitalist production,” The Review of Radical Political Economics, Summer 1974, 6 (2), 60–112.
McDonald, James Ted and ChristpherWorswick, “Wages, implicit contracts, and the business cycle: Evidence from Canadian micro data,” The Journal of Political Economy, August 1999, 107 (4), 884–892.
Milgrom, Paul and John Roberts, Economics, organization, and management, Englewood Cliffs, NJ: Prentice Hall, 1992.
Mincer, Jacob and Yoshio Higuchi, “Wage structure and labor turnover in the United States and Japan,” Journal of the Japanese and International Economies, June 1988, 2 (2), 97–133.
Moriguchi, Chiaki, “Implicit contracts, the Great Depression, and institutional change: a comparative analysis of U.S. and Japanese employment relations, 1920-1940,” The Journal of Economic History, September 2003, 63 (3), 625–665.
M¨ unich, Daniel, Jan Svejnar, and Katherine Terrell, “Returns to human capital under communist wage grid and during the transition to a market economy,” The Review of Economics and Statistics, February 2005a, 87 (1), 100–123.
M¨ unich, Daniel, Jan Svejnar, and Katherine Terrell, “Is women’s human capital valued more by markets than by planners?,” Journal of Comparative Economics, June 2005b, 33 (2), 278–299.
Nakamura, Naofumi, “Sengo Kamaishi seitetsujo ni okeru jukuren no saihen: hozen shokuba no jirei (From apprenticeships to firm-specific skills: a case of the maintenance workshop in the post-war Kamaishi Steel Works),” Shakai Kagaku Kenkyu (The Journal of Social Science), March 2010, 61 (5-6), 3–26. Institute of Social Science, The University of Tokyo.
Novack, David E. and Richard Perlman, “The structure of wages in the American iron and steel industry, 1860-1890,” The Journal of Economic History, September 1962, 22 (3), 334–347.
Odaka, Konosuke, “The dual strucutre of the Japanese economy,” in Takafusa Nakamura and Konosuke Odaka, eds., The economic history of Japan: 1600-1990, volume 3: Economic history of Japan 1914-1955: A dual strucutre, Oxford University Press New York 2003, pp. 111–136.
Ohkusa, Yasushi and Souichi Ohta, “An empricial study of the wage-tenure profile in Japanese manufacturing,” Journal of the Japanese and International Economies, June 1994, 8 (2), 173–203.
Oleopoulos, Philip, “Estimating average and local average treatment effects of education when compulsory schooling laws really matter,” The American Economic Review, March 2005, 96 (1), 152–175.
Ono, Hiroshi, “Lifetime employment in Japan: Concepts and measurements,” Journal of the Japanese and International Economies, March 2010, 24 (1), 1–27.
Oyer, Paul, “Ability and employer learning: Evidence from the economist labor market,” Journal of the Japanese and International Economies, June 2008, 22 (2), 268–289.
Parent, Daniel, “Wages and mobility: The impact of employer-provided training,” Journal of Labor Economics, April 1999, 17 (2), 298–317.
Parent, Daniel, “Industry-specific capital and the wage profile: Evidence from the National Longitudinal Survey of Youth and the Panel Study of Income Dynamics,” Journal of Labor Economics, April 2000, 18 (2), 306–323.
Park, Heum Jin, “Estimation of sheepskin effects using the old and the new measures of educational attainment in the Current Population Survey,” Economics Letters, February 1999, 62 (2), 237–240.
Patrinos, Harry Anthony, “Non-linearities in the returns to education: Sheepskin effects or threshold levels of human capital?,” Applied Economics Letters, March 1996, 3 (3), 171–173.
Pinkston, Joshua C., “Screening discrimination and the determinants of wages,” Labour Economics, December 2003, 10 (6), 643–658.
Pinkston, Joshua C., “A model of asymmetric employer learning with testable implications,” The Review of Economic Studies, 2009, 76 (1), 367–394.
Poletaev, Maxim and Chris Robinson, “Human capital specificity: Evidence from the Dictionary of Occupational Titles and displaced worker survey, 1984-2000,” Journal of Labor Economics, July 2008, 26 (3), 387–420.
Pons, Empar, “Diploma effects by gender in the Spanish labour market,” Labour, March 2006, 20 (1), 139–157.
Pons, Empar and Juan M. Blanco, “Sheepskin effects in the Spanish labour market: A public-sector analysis,” Education Economics, September 2005, 13 (3), 331–347.
Riley, John G., “Testing the educational screening hypothesis,” The Journal of Political Economy, October 1979, 87 (5-2), s227–s252.
Sch¨onberg, Uta, “Testing for asymmetric employer learning,” Journal of Labor Economics, October 2007, 25 (4).
Shaw, Kathryn and Edward P. Lazer, “Tenure and output,” Labour Economics, August 2008, 15 (4), 705–724.
Silles, Mary, “Sheepskin effects in the returns to education,” Applied Economics Letters, February 2008, 15 (3), 217–219.
Spence, Michael, “Job market signaling,” The Quarterly Journal of Economics, August 1973, 87 (3), 355–374.
Spence, Michael, “Signaling in retrospect and the informational structure of markets,” The American Economic Review, June 2002, 92 (3), 434–459.
Stigler, George J., “Information in the labor market,” The Journal of Political Economy, October 1962, 70 (5-2), 94–105.
Stiglitz, Joseph E., “The theory of “screening,” education, and the distribution of income,” The American Economic Review, June 1975, 65 (3), 283–300.
Stone, Kathrine, “The origins of job structures in the steel industry,” The Review of Radical Political Economics, Summer 1974, 6 (2), 113–173.
Sugayama, Shinji, “Shusha” shakai no tanjo: Blue collar kara white collar he (Birth of the corporate society: from blue collar to white collar), Nagoya: Nagoya University Press, 2011.
Tabman, Paul J. and Terence J. Wales, “Higher education, mental ability, and screening,” The Journal of Political Economy, January 1973, 81 (1), 28–55.
Trostel, Philip and Ian Walker, “Sheepskin effects in work behaviour,” Applied Economics, January 2004, 36 (17), 1959–1966.
Tyler, John H., Richard J. Murnane, and John B. Willett, “Estimating the labor market signaling value of GED,” The Quarterly Journal of Economics, May 2000, 115 (2), 431–468.
Ueshima, Yasuhiro, “Why wages equalized in the high-speed growth era: Japanese manufacturing, 1961-1969,” Journal of the Japanese and International Economies, March 2003, 17 (1), 33–54.
Ueshima, Yasuhiro, Takuji Funaba, and Takenori Inoki, “New technology and demand for educated workers: The experience of Japanese manufacturing in the ear of high-speed growth,” Journal of the Japanese and International Economies, March 2006, 20 (1), 50–76.
Ujihara, Shojiro, Nihon rodo mondai kenkyu (Research on industrial relations in Japan), Tokyo: The University of Tokyo Press, 1966.
Umezaki, Osamu, “Keiei gorika to tokai tenshutsu: 1960 nendai ni okeru naibu rodo shijo keisei no ichi sokumen (Restructuring of Kamaishi Iron and SteelWorks and the transfer of emoloyees to Tokai Iron and Steel Works: an analysis of the internal labour market formation in the 1960s),” Shakai Kagaku Kenkyu (The Journal of Social Science), March 2010, 61 (5-6), 27–54. Institute of Social Science, The University of Tokyo.
Weinberg, Bruce A., “Long-term wage fluctuations with industry-specific human capital,” Journal of Labor Economics, January 2001, 19 (1), 231–264.
Williamson, Oliver, The economic institutions of capitalism: Firms, markets, relational contracting, New York: The Free Press, 1985.
Williamson, Oliver, Michael Wachter, and Jeffrey Harris, “Understanding the employment relation: the analysis of idiosyncratic exchange,” The Bell Journal of Economics, Spring 1975, 6 (1), 250–278.
Wolpin, Kenneth I., “Education and screening,” The American Economic Review, December 1977, 67 (5), 949–958.
Available Versions of this Item
Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s. (deposited 06. May 2011 14:10)
Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s. (deposited 15. May 2011 04:35)
- Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s. (deposited 05. Sep 2011 11:28)
- Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s. (deposited 15. May 2011 04:35)