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Changing Unchanged Inequality: Higher Education, Youth Population, and the Japan's Seniority Wages

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  • Ken Yamada
  • Daiji Kawaguchi

Abstract

Wage inequality declined in the 1990s for full-time male workers in Japan, while it in- creased in the 2000s. We find that a decreased return to firm-specific human capital, which has been neglected in previous empirical analyses of inequality, is a key factor preventing a rise in wage inequality during the prolonged period of economic stagnation, known as Japan’s lost decades. A significant fraction of the increase in wage inequality in the 2000s is a mechanical change arising from an increased share of educated and experienced workers.

Suggested Citation

  • Ken Yamada & Daiji Kawaguchi, 2012. "Changing Unchanged Inequality: Higher Education, Youth Population, and the Japan's Seniority Wages," Global COE Hi-Stat Discussion Paper Series gd12-243, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hst:ghsdps:gd12-243
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    File URL: http://gcoe.ier.hit-u.ac.jp/research/discussion/2008/pdf/gd12-243.pdf
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    References listed on IDEAS

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    Cited by:

    1. Jeremy Lise & Nao Sudo & Michio Suzuki & Ken Yamada & Tomoaki Yamada, 2014. "Wage, Income and Consumption Inequality in Japan, 1981-2008: from Boom to Lost Decades," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 17(4), pages 582-612, October.
    2. Daiji Kawaguchi & Yuko Mori, 2014. "Winning the race against technology," Bank of Japan Working Paper Series 14-E-5, Bank of Japan.

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    More about this item

    Keywords

    wage inequality; firm-specific human capital; heterogeneous returns; seniority wages; composition effects;
    All these keywords.

    JEL classification:

    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • 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
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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