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Schooling, employer learning, and internal labor market effect: Wage dynamics and human capital investment in the Japanese steel industry, 1930-1960s

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  • Nakabayashi, Masaki

Abstract

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.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 30749.

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Date of creation: 29 Apr 2011
Date of revision: 06 May 2011
Handle: RePEc:pra:mprapa:30749

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Keywords: employer learning; schooling and wages; internal labor market effect;

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