IDEAS home Printed from https://ideas.repec.org/p/kob/dpaper/dp2026-17.html

Human Capital Externalities in Japanese Local Labor Markets

Author

Listed:
  • Yudai Higashi

    (Faculty of Economics, Kyoto Sangyo University and Research Institute for Economics & Business Administration, Kobe University, JAPAN)

Abstract

This study examines the effect of the share of college graduates on average wages in local labor markets, using data covering 1990–2020 in Japan. To address the endogeneity of the local college graduate share arising from labor demand shocks for college graduates, the estimation model uses an instrumental variable approach. According to the results, an increase in the share of college graduates has a positive effect on college graduates' wages during the 2000s and 2010s, while it has no significant effect during the 1990s. However, there is no significant effect on the wages of non-college graduates across all sample periods. These results suggest that human capital externalities were generated among college graduates in local labor markets during the 2000s and 2010s, but no such externalities arose from interactions between college and non-college graduates. Overall, external returns to higher education in terms of local wages appear to be limited in Japan.

Suggested Citation

  • Yudai Higashi, 2026. "Human Capital Externalities in Japanese Local Labor Markets," Discussion Paper Series DP2026-17, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2026-17
    as

    Download full text from publisher

    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2026-17.pdf
    File Function: First version, 2026
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;

    JEL classification:

    • I26 - Health, Education, and Welfare - - Education - - - Returns to 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
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kob:dpaper:dp2026-17. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Office of Promoting Research Collaboration, Research Institute for Economics & Business Administration, Kobe University (email available below). General contact details of provider: https://edirc.repec.org/data/rikobjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.