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College Quality and Earnings in the Japanese Labor Market

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Abstract

The motivations underlying the pursuit of college prestige in Japan presumes a labor market that rewards workers according to the quality of the college that they attended. Yet, studies that examine the relationship between college quality and earnings in Japan remain few and riddled with shortcomings. This paper examines the returns to college education among Japanese men. Using a 1995 cross-sectional data of Japanese workers, I find that college quality significantly improves earnings. My findings confirm that college quality plays a crucial role in shaping both incentives and earnings in the Japanese labor market. The paper also examines the so-called distinctive features of the Japanese labor market, and confirms the significant impact of tenure and firm-size on earnings, and the similarity in the earnings profiles between blue- and white-collar workers.

Suggested Citation

  • Ono, Hiroshi, 2000. "College Quality and Earnings in the Japanese Labor Market," SSE/EFI Working Paper Series in Economics and Finance 395, Stockholm School of Economics, revised 11 Mar 2003.
  • Handle: RePEc:hhs:hastef:0395
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    File URL: http://swopec.hhs.se/hastef/papers/hastef0395.pdf
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    1. Griliches, Zvi & Mason, William M, 1972. "Education, Income, and Ability," Journal of Political Economy, University of Chicago Press, vol. 80(3), pages 74-103, Part II, .
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    3. Kawashima, Yoko & Tachibanaki, Toshiaki, 1986. "The effect of discrimination and of industry segmentation on Japanese wage differentials in relation to education," International Journal of Industrial Organization, Elsevier, vol. 4(1), pages 43-68, March.
    4. Kato, Takao & Rockel, Mark, 1992. "Experiences, credentials, and compensation in the Japanese and U.S. managerial labor markets: Evidence from new micro data," Journal of the Japanese and International Economies, Elsevier, vol. 6(1), pages 30-51, March.
    5. Stacy Berg Dale & Alan B. Krueger, 2002. "Estimating the Payoff to Attending a More Selective College: An Application of Selection on Observables and Unobservables," The Quarterly Journal of Economics, Oxford University Press, vol. 117(4), pages 1491-1527.
    6. Rebick Marcus E., 1993. "The Persistence of Firm-Size Earnings Differentials and Labor Market Segmentation in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 7(2), pages 132-156, June.
    7. Hause, John C, 1971. "Ability and Schooling as Determinants of Lifetime Earnings or If You're So Smart, Why Aren't You Rich?," American Economic Review, American Economic Association, vol. 61(2), pages 289-298, May.
    8. Lewis C. Solomon, 1975. "The Definition of College Quality and Its Impact on Earnings," NBER Chapters,in: Explorations in Economic Research, Volume 2, number 4, pages 537-587 National Bureau of Economic Research, Inc.
    9. Loury, Linda Datcher & Garman, David, 1995. "College Selectivity and Earnings," Journal of Labor Economics, University of Chicago Press, vol. 13(2), pages 289-308, April.
    10. James, Estelle, et al, 1989. "College Quality and Future Earnings: Where Should You Send Your Child to College?," American Economic Review, American Economic Association, vol. 79(2), pages 247-252, May.
    11. Behrman, Jere R & Birdsall, Nancy, 1983. "The Quality of Schooling: Quantity Alone is Misleading," American Economic Review, American Economic Association, vol. 73(5), pages 928-946, December.
    12. Terence J. Wales, 1973. "The Effect of College Quality on Earnings: Results from the N B E R-Thorndike Data," Journal of Human Resources, University of Wisconsin Press, vol. 8(3), pages 306-317.
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    Cited by:

    1. Nobuyoshi Kikuchi, 2017. "Marginal Returns to Schooling and Education Policy Change in Japan," ISER Discussion Paper 0996, Institute of Social and Economic Research, Osaka University.
    2. Nobuyoshi Kikuchi, 2017. "Marginal Returns to Schooling and Education Policy Change in Japan," ISER Discussion Paper 0996r, Institute of Social and Economic Research, Osaka University, revised Oct 2017.

    More about this item

    Keywords

    human capital formation; returns to education;

    JEL classification:

    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East

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