The Relationship Between the Effects of a Wife’s Education on her Husband’s Earnings and her Labor Participation: Japan in the period 2000 -2003

In this paper, we explore the relationship between the influence of wives’ human capital on their husbands’ earnings and their labor participation using individual level data for Japan in the period 2000–2003. We found that a wife’s human capital has a positive effect on her husband’s earnings regardless of her work status when the entire sample is used. Furthermore, we focused on couples with an age difference exceeding five years to remove the assortative mating effect. By using this subsample, the positive effect of a wife’s education is observed when a wife is a non-worker, that is she does not work outside the home, but disappears in those who are workers, that is they work outside the home. This suggests that a wife’s labor participation drastically reduces the positive effect of her human capital on her husband’s earnings after controlling for the assortative mating effect. It follows from this that an educated housewife improves her husband’s productivity, consequently increasing his earnings, whereas a working wife appears to not have enough time to do so. These findings are consistent with implications drawn from the situation in the United States (Jepsen 2005).