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The wage differential between college and high-school graduates in the 2000s: The effect of labor substitution between age groups

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  • Kozue SEKIJIMA

    (Osaka School of International Public Policy, Osaka University)

Abstract

This paper investigates whether labor substitution between age groups has become higher in the 2000s. I update Noro and Ohtake (2006) which uses the Basic Survey on Wage Structure in Japan and estimates elasticity of substitution between employees in three age groups before 2001. They employ a demand-supply framework of Card and Lemieux (2001) assuming an imperfect substitution between age cohorts. The assumption is still found to be reasonable in the estimates up to 2011. The elasticities of substitution have remained in the 2000s compared to estimates before the 1990s. This implies substitution between younger labor and older labor has not increased although it is thought to be part of a background of deteriorating youth employment..

Suggested Citation

  • Kozue SEKIJIMA, 2014. "The wage differential between college and high-school graduates in the 2000s: The effect of labor substitution between age groups," OSIPP Discussion Paper 14J006, Osaka School of International Public Policy, Osaka University.
    • Handle: RePEc:osp:wpaper:14j006
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    More about this item

    Keywords

    wage differential; substitution between age groups; youth employment;
    All these keywords.

    JEL classification:

    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity

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