Career Experiences Replacedeconseminar/20130508Nakabayashi GRIPS...Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4 Motivation, cont. – Japan is speciﬁc

Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 1

Career Experiences ReplacedEmergence of Japanese Internal Labor Markets

Masaki Nakabayashi∗

Seminar in Economics, National Graduate Institute for Policy Studies

∗Institute of Social Science, The University of Tokyo. mn@iss.u-tokyo.ac.jp

1. Introduction

⊲ 1. Introduction

Motivation

Motivation, cont

Results

2. Underlining

framework

3. Existence of an

internal labor market

4. Wage growth in

the internal labor

market

5. Discussion

Motivation

1. Introduction

⊲ Motivation

Motivation, cont

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Motivation

1. Introduction

⊲ Motivation

Motivation, cont

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Motivation.

Motivation

1. Introduction

⊲ Motivation

Motivation, cont

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Motivation.

– Contemporary Japanese firms provide a rare example ofan internal labor market practice focusing on newgraduates (“ports of entry”).

Motivation

1. Introduction

⊲ Motivation

Motivation, cont

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Motivation.

– Contemporary Japanese firms provide a rare example ofan internal labor market practice focusing on newgraduates (“ports of entry”).

– Prevalence of internal labor markets have affected thelabor market, as shown in persistent cohort effects(Genda et al 2010 JHR; Kahn 2010 LE, von Wachter andBender 2006 AER; Oreopulos et al 2012 AEJ: AE).

Motivation, cont

1. Introduction

Motivation

⊲ Motivation, cont

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Motivation, cont

1. Introduction

Motivation

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Motivation, cont.

Motivation, cont

1. Introduction

Motivation

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– Japan is specific in

Motivation, cont

1. Introduction

Motivation

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ mid-career recruiting is inactive (contrast to the US).

Motivation, cont

1. Introduction

Motivation

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ firm-specificity has larger impact thanindustry-specificity (contrast to Germany).

Motivation, cont

1. Introduction

Motivation

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– How the Japanese internal labor markets were formed?

Motivation, cont

1. Introduction

Motivation

Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– How the Japanese internal labor markets were formed?

⊲ Study of internal labor market formation at aJapanese iron works, 1929-1969.

Results

1. Introduction

Motivation

Motivation, cont

⊲ Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Results

1. Introduction

Motivation

Motivation, cont

⊲ Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Main results.

Results

1. Introduction

Motivation

Motivation, cont

⊲ Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Main results.

1. While the internal labor market in the firm had beenenhanced from the 1930s, mid-career recruiting wasactive by the end of the 1960s.

Results

1. Introduction

Motivation

Motivation, cont

⊲ Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Main results.

2. Return on firm-specific skills increased from the 1950s.

Results

1. Introduction

Motivation

Motivation, cont

⊲ Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Main results.

3. Return on schooling sharply increased and return onprevious careers decreased from the 1950s.

Results

1. Introduction

Motivation

Motivation, cont

⊲ Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Main results.

� Interpretation.

Results

1. Introduction

Motivation

Motivation, cont

⊲ Results

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Main results.

� Interpretation.

– Extended schooling supplanted mid-career experiencesafter the 1970s, and then the contemporary Japaneseinternal labor markets were formed.

2. Underlining framework

1. Introduction

⊲2. Underlining

frameworkDeVaro and

Waldman 2012Asymmetric learning

and firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

DeVaro and Waldman 2012

1. Introduction

2. Underlining

framework

⊲DeVaro and

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

1. Introduction

2. Underlining

framework

⊲DeVaro and

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� DeVaro and Waldman 2012 JOLE.

1. Introduction

2. Underlining

framework

⊲DeVaro and

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– A model of internal labor markets focusing on

1. Introduction

2. Underlining

framework

⊲DeVaro and

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Employer learning asymmetric between current andpotential employers.

1. Introduction

2. Underlining

framework

⊲DeVaro and

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Employer learning asymmetric between current andpotential employers.

⊲ Firm-specific skill acquisition as well as general skillacquisition.

Asymmetric learning and firm-specific skill

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� A lemma deduced from DeVaro and Waldman 2012.

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– If employer learning is asymmetric and return onfirm-specific skill is strictly positive, cohort effects arepersistent (Lemma 1).

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– Internal labor markets consisting of asymmetric learningand firm-specific skill acquisition.

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Testing existence of internal labor markets.

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– Cohort effects with

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– Cohort effects with controlling for,

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ exogenous shocks,

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ exogenous shocks, with consideration of possibleinsurance function of internal labor markets (Beaudryand DiNardo 1991 JPE).

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ return on task-specific skill,

1. Introduction

2. Underlining

frameworkDeVaro and

Waldman 2012

Asymmetric

learning and

firm-specific skill

Transformation of

the Japanese steel

industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ return on task-specific skill, which also generatescohort effects (Gibbons and Waldman 2006 JOLE).

Transformation of the Japanese steel industry

1. Introduction

2. Underlining

frameworkDeVaro and

Transformation

of the Japanese

steel industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

1. Introduction

2. Underlining

frameworkDeVaro and

Transformation

of the Japanese

steel industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Japanese manufacturing began to form internal labormarkets in the 1920s, as in the US.

1. Introduction

2. Underlining

frameworkDeVaro and

Transformation

of the Japanese

steel industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

� Technology-skill/education complementary development(Goldin and Katz 2008) from the 1950s, as the steel industryexperienced massive modernization investment.

1. Introduction

2. Underlining

frameworkDeVaro and

Transformation

of the Japanese

steel industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– Systematic production lines required general cognitiveskills and understandings of firm-specific systems.

1. Introduction

2. Underlining

frameworkDeVaro and

Transformation

of the Japanese

steel industry

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

– Systematic production lines required general cognitiveskills and understandings of firm-specific systems.

– Seeking better educated workers, and enhancing internallabor markets from the 1950s.

3. Existence of an internal labor market

1. Introduction

2. Underlining

framework

3. Existence of

an internal labor

marketCase establishment

and dataExistence of internal

labor market and its

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

Case establishment and data

1. Introduction

2. Underlining

framework

3. Existence of an

establishment

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� This research uses original wage records of 1557 workers whojoined the case iron works from 1928 to 1967 and wererelocated to another iron works in the late 1960s.

1. Introduction

2. Underlining

framework

3. Existence of an

establishment

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Schooling and physiological characteristics whenrecruited, previous career experiences, and panel data ofwage, job assignments, promotion, family composition,and clinical history are included.

1. Introduction

2. Underlining

framework

3. Existence of an

establishment

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Composition of cohorts (Table 1).

1. Introduction

2. Underlining

framework

3. Existence of an

establishment

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Composition of cohorts (Table 1).

⊲ Several years of previous work experience on average,in contrast to contemporary major Japanese firms.

Existence of internal labor market and its change

1. Introduction

2. Underlining

framework

3. Existence of an

internal labor marketCase establishment

and data

Existence of

internal labor

market and its

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

and data

Existence of

internal labor

market and its

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Indicators of internal labor markets.

1. Introduction

2. Underlining

framework

3. Existence of an

and data

Existence of

internal labor

market and its

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Persistent cohort effects,

1. Introduction

2. Underlining

framework

3. Existence of an

and data

Existence of

internal labor

market and its

change

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Persistent cohort effects, with controlling forindustry-/job- specific skills and GNE growth rate(Lemma 1).

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Table 2: Regression of real wage (rw) on

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– years of schooling (S),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– previous work experience (pre),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– interactions of pre with the previous same industrydummy (pre× ibs)

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– interactions of pre with the previous same industrydummy (pre× ibs) and with the previous same jobdummy (pre× jbs),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– tenure at the case firm (ten),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– 2-year joined dummies (yj1928− 1929, yj1930− 1931,...),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– ten× yj19XX,

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– ten× yj19XX,

– with controlling for year dummies and growth rate ofGNE (∆rgne).

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Table 2, cont.

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Table 2, cont.

– Cohort effects survive in all cohorts (model 2-1 in Table

Table 2 Effect of cohort and tenure2-1

Estimation method panel least squaresDependent variable log(rw)Cross-section pooled (no control)Independent variables coefficient t statistic

c 1.0259 58.5498 ***

log(S ) 0.0793 20.2840 ***

log(pre) 0.0783 87.8428 ***

log(pem)×ibs 0.0113 12.4031 ***

log(pem)×jbs 0.0192 18.4178 ***

log(ten) 0.1068 48.8122 ***

yj1930-1931 -0.0664 -3.1110 ***

yj1932-1933 -0.0688 -4.2581 ***

yj1934-1935 -0.1416 -10.1613 ***

yj1936-1937 -0.1701 -12.6437 ***

yj1938-1939 -0.1824 -14.2604 ***

yj1940-1941 -0.2369 -18.5503 ***

yj1942-1943 -0.3011 -23.2736 ***

yj1944-1945 -0.3656 -27.9614 ***

yj1946-1947 -0.4000 -29.8086 ***

yj1948-1949 -0.4677 -35.9202 ***

yj1950-1951 -0.5401 -40.4203 ***

yj1952-1953 -0.6091 -42.1070 ***

yj1954-1955 -0.6373 -44.5672 ***

yj1956-1957 -0.7695 -55.2790 ***

yj1958-1959 -0.8536 -59.3754 ***

yj1960-1961 -0.9041 -60.3538 ***

yj1962-1963 -0.9470 -61.7582 ***

yj1964-1965 -0.8564 -49.7182 ***

yj1966-1967 -0.9392 -43.0552 ***

year dummies yesΔrgne yes

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Wage residuals ([[observed real wage (rw)]− [real wageestimated from observables with models 3-1 and 3-3 inTable 3 (E[rw])]]) reject panel unit root tests:

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– The firm’s evaluation of unobservable ability of eachworker converged to a unique fixed point.

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Toward the true abilities, the firm was learning.

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Toward the true abilities, the firm was learning.

– “Predictable winners and losers” (Baker et al 1994 QJE).

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Wage profiles: Maximum (Figure 1), medium (Figure 2),and minimum (Figure 3) in cohorts.

Figure 1 Wage curves of two consectuve cohort year groups:Mean in each calender year

Figure 2 Wage curves of two consecutive cohort year groups: Maximum in each calender yeaar

Figure 3 Wage curves of two consecutive cohort year groups: Minimum in each calender year

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Wage profiles: Maximum (Figure 1), medium (Figure 2),and minimum (Figure 3) in cohorts.

– “Predictable winners and losers” shown in suppressedwages of “losers”.

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

� Increasing coefficient of tenure (ten) as cohorts come downin model 2-2, Table 2.

Table 2 Effect of cohort and tenure, cont.2-2

Estimation method panel least squaresDependent variable log(rw)Cross-section pooled (no control)Independent variables coefficient t statistic

c 1.2552 58.1633 ***

log(S ) 0.0793 20.8082 ***

log(pre) 0.0787 90.4507 ***

log(pre)×ibs 0.0112 12.6312 ***

log(pre)×jbs 0.0188 18.5190 ***

log(ten) 0.0292 6.5046 ***

yj1930-1931×log(ten) -0.0031 -1.4496yj1932-1933×log(ten) 0.0060 4.6278 ***

yj1934-1935×log(ten) 0.0044 4.5885 ***

yj1936-1937×log(ten) 0.0062 7.2346 ***

yj1938-1939×log(ten) 0.0084 11.2656 ***

yj1940-1941×log(ten) 0.0101 13.4014 ***

yj1942-1943×log(ten) 0.0149 17.9592 ***

yj1944-1945×log(ten) 0.0200 23.1121 ***

yj1946-1947×log(ten) 0.0249 26.4728 ***

yj1948-1949×log(ten) 0.0151 16.8488 ***

yj1950-1951×log(ten) 0.0197 17.9671 ***

yj1952-1953×log(ten) 0.0216 12.4854 ***

yj1954-1955×log(ten) 0.0259 15.1794 ***

yj1956-1957×log(ten) 0.0259 17.3393 ***

yj1958-1959×log(ten) 0.0320 16.1331 ***

yj1960-1961×log(ten) 0.0415 14.1824 ***

yj1962-1963×log(ten) 0.0342 9.1698 ***

yj1964-1965×log(ten) 0.0439 6.4691 ***

yj1966-1967×log(ten) 0.0295 1.7782 *

year dummies yesyear joined dummies yes

Δrgnp yes

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

– Increasing return on firm-specific human capital, withcontrolling for

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

⊲ GNE growth rate (∆rgne),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

⊲ cohort effects (yj19XX),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

⊲ schooling as general human capital (S),

Existence, cont

1. Introduction

2. Underlining

framework

3. Existence of an

change

Existence, cont

⊲ Existence, cont

4. Wage growth in

the internal labor

market

5. Discussion

⊲ schooling as general human capital (S),

⊲ and industry-/task- specific skills acquired prior tojoining the case firm (pre× ibs, pre× jbs).

4. Wage growth in the internal labor market

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth

in the internal

labor marketSkill, wage and

reproduction

Skill, cont

Reproduction

Schooling and career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

Skill, wage and reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲Skill, wage and

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲Skill, wage and

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

� Impact of human capital investment (Table 3): Regressionof real wage (rw) on

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲Skill, wage and

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– height (hgt), years of schooling (S),

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲Skill, wage and

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– previous work experience (pre) and previous employment(pem),

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲Skill, wage and

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– the same previous industry dummy (ibs× pem) and thesame previous job dummy (jbs× pem),

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲Skill, wage and

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– tenure (ten),

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲Skill, wage and

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– tenure (ten),

– in-house training program dummies (dcy: 1927-1935, sy:1935-1947, dct: 1939-1946, dc: 1946-1973), dcy× ten,sy × ten, dct× ten, dc× ten.

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

marketSkill, wage and

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

� Impact of human capital investment (Table 3), cont.

Table 3 Wage regression3-1 3-2

Estimation method panel extended generalized least squaresDependent variable log(rw) log(rw)Cross-section random effect random effectPeriod (year) pooled (no control) pooled (no control)Independent variables coefficient t statistic coefficient t statistic

c -5.1929 -90.3758 *** -5.1849 -90.5617 ***

log(age) 1.5966 83.4939 *** 1.5866 82.8477 ***

log(S ) 0.1261 8.0918 *** 0.1353 8.7012 ***

log(S )×psw 0.1926 56.1371 *** 0.1868 54.2152 ***

log(pre) -0.0649 -13.5960 *** -0.0658 -13.8355 ***

log(pem) 0.0093 2.6088 *** 0.0084 1.9813 ***

log(pem)×ibs 0.0316 7.8710 ***

log(pem)×jbs -0.0432 -9.9478 ***

log(ten) 0.3013 53.8670 *** 0.3051 54.4364 ***

dcy -1.1508 -2.7924 *** -1.1462 -2.7821 ***

dcy×log(ten) 0.3935 2.7183 *** 0.3934 2.7177 ***

sy -0.3313 -8.2417 *** -0.3457 -8.6061 ***

sy×log(ten) 0.1034 6.7614 *** 0.1052 6.8851 ***

dct -0.3483 -9.4918 *** -0.3581 -9.7508 ***

dct×log(ten) 0.1125 8.0721 *** 0.1141 8.1829 ***

dc 0.4271 22.6746 *** 0.4412 23.4141 ***

dc×log(ten) -0.1500 -17.1910 *** -0.1539 -17.6580 ***

Table 3 Wage regression, cont.3-3 3-4

c -4.9152 -79.9421 *** -4.9043 -80.1085 ***

log(hgt) 0.5825 8.2301 *** 0.5631 8.0003 ***

log(age) 1.5772 75.9297 *** 1.5690 75.4308 ***

log(S ) 0.0015 0.0897 0.0087 0.5040log(S )×psw 0.2294 67.6927 *** 0.2248 65.9329 ***

log(pre) -0.0787 -13.5901 *** -0.0787 -13.6572 ***

log(pem) -0.0196 -4.8360 *** -0.0249 -5.2098 ***

log(pem)×ibs 0.0319 7.3004 ***

log(pem)×jbs -0.0381 -7.9866 ***

log(ten) 0.3807 68.7515 *** 0.3831 69.0893 ***

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Positive impact of general human capital:

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ hgt, S, pre.

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ hgt, S, pre.

– Industry-specificity did matter.

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ hgt, S, pre.

⊲ ibs× pem.

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ hgt, S, pre.

⊲ ibs× pem.

– Large impact of firm-specific human capital:

Skill, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

⊲ Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ hgt, S, pre.

⊲ ibs× pem.

– Large impact of firm-specific human capital:

⊲ ten.

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Human capital components,

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– and real wage (rw).

Table 4 Fertility decision by employees.4-1 4-2

Estimation method panel extended generalized least squaresDependent variable log(noc) log(noc)Cross-section pooled (no control ) random effectPeriod (year) fixed (year dummies inserted) pooled (no control)Independent variables coefficient t statistic coefficient t statistic

c -3.9310 -41.0856 *** -3.3146 -22.7870 ***

log(hgt) 0.2125 2.9278 *** -0.0794 -0.4104log(age) 1.2704 34.8650 *** 1.1175 28.0919 ***

log(S ) -0.0861 -5.0113 *** -0.1065 -2.2885 **

log(pre) 0.0354 5.6221 *** 0.0960 8.2808 ***

log(ten) 0.0366 3.5823 *** 0.0693 7.1136 ***

log(rw) 0.3200 9.6514 *** 0.0912 8.8631 ***

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Positive coefficients of hgt, pre, ten as well as rw.

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ Human capital components had positive impactsindependently from current wage.

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

■ Expected future revenue was critical as well.

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ Job security at the firm ten was not dominant.

Reproduction

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

⊲ Reproduction

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ Job security at the firm ten was not dominant.

■ A flexible labor market was socially stable.

Schooling and career experiences

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

Schooling and

career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

Schooling and

career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

� Changes in training programs (models 3-1 and 3-2 in Table

Table 3 Wage regression3-1 3-2

c -5.1929 -90.3758 *** -5.1849 -90.5617 ***

log(age) 1.5966 83.4939 *** 1.5866 82.8477 ***

log(S ) 0.1261 8.0918 *** 0.1353 8.7012 ***

log(S )×psw 0.1926 56.1371 *** 0.1868 54.2152 ***

log(pre) -0.0649 -13.5960 *** -0.0658 -13.8355 ***

log(pem) 0.0093 2.6088 *** 0.0084 1.9813 ***

log(pem)×ibs 0.0316 7.8710 ***

log(pem)×jbs -0.0432 -9.9478 ***

log(ten) 0.3013 53.8670 *** 0.3051 54.4364 ***

dcy -1.1508 -2.7924 *** -1.1462 -2.7821 ***

dcy×log(ten) 0.3935 2.7183 *** 0.3934 2.7177 ***

sy -0.3313 -8.2417 *** -0.3457 -8.6061 ***

sy×log(ten) 0.1034 6.7614 *** 0.1052 6.8851 ***

dct -0.3483 -9.4918 *** -0.3581 -9.7508 ***

dct×log(ten) 0.1125 8.0721 *** 0.1141 8.1829 ***

dc 0.4271 22.6746 *** 0.4412 23.4141 ***

dc×log(ten) -0.1500 -17.1910 *** -0.1539 -17.6580 ***

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

Schooling and

career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– By the middle 1940s (dcy, sy, dct).

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

Schooling and

career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ Negative coefficients of the training programdummies: dcy, sy, dct

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

Schooling and

career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ Positive coefficients of interactions with workexperience: dcy × ten, sy × ten, dct× ten.

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

Schooling and

career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

■ Less productive employees were selected fortraining.

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

Schooling and

career

experiences

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

■ Less productive employees were selected fortraining.

■ Training programs and work experience werecomplements.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

� Changes in training programs (Table 3), cont.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– From the late 1940s (dc).

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ Positive coefficient of the training program dummy:dc.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

⊲ Negative coefficient of interaction with tenure:dc× ten.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

■ More productive employees were selected fortraining.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

■ Training program and experience became lesscomplementary

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

■ Training program and experience became lesscomplementary and/or

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

■ Training program and experience became lesscomplementary and/or statistical discrimination inselection for training was strengthened.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

� Table 5: Selection for training programs.

Table 5 Probability of acceptance as a trainee for in-house training programs5-1 5-2 5-3 5-4

Estimation method binary logit binary logit binary logit binary logitDependent variable dcy sy dct dcIndependent variablescoefficient z statistic coefficient z statistic coefficient z statistic coefficient z statistic

c 2.3746 0.6086 -8.8777 -9.5963 *** 2.9806 2.5088 ** 16.7397 24.8991 ***

log(hgt) -5.0770 -5.2063 *** -0.9344 -0.6923 6.3238 9.9823 ***

log(age) -3.5316 -3.4444 *** 1.6106 7.3966 *** -0.0497 -0.1808 -2.6587 -20.1175 ***

log(S ) -1.2195 -1.0438 0.3655 1.4109 -3.4230 -9.3482 *** -3.4935 -17.0443 ***

log(pre) 2.4420 4.4549 *** -1.1127 -12.3857 *** -0.4552 -3.4648 *** -1.0546 -25.3514 ***

log(pem) 0.9264 10.5333 *** 1.1091 10.5331 *** -1.8567 -23.6954 ***

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

⊲ By the middle 1940s (dcy, sy, dct):

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

■ More likely accepted shorter employees.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

⊲ From the late 1940s (dc):

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

■ More likely accepted taller employees.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

– Previous work experience and employment:

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

⊲ From the middle 1940s (dct, dc):

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– Height:

⊲ From the middle 1940s (dct, dc):

■ More likely accepted employees with less previousexperience.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

� Table 5 and Table 3: Selection for training programs, cont.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– From the late 1940s.

Schooling, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲ Schooling, cont

Return on schooling

Return on career

experiences

5. Discussion

– From the late 1940s.

⊲ Expectedly more talented employees were selected,based on statistical discrimination by height.

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

� Return on schooling (Table 6): Regressing real wage (rw) on

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S),

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S), with controlling for employerlearning effect (S × ten).

Table 6 Change in return on education.6-1 6-2 6-3

Estimation method panel extended generalized least squaresDependent variable log(rw) log(rw) log(rw)Cross-section random effect random effect random effectPeriod (year) pooled (no control) pooled (no control) pooled (no control)Independent variables coefficient t statistic coefficient t statistic coefficient t statistic

c -0.9826 -34.7064 *** -1.0913 -27.4007 *** -0.9943 -35.1979 ***

log(pre) 0.1198 35.5105 *** 0.1181 34.7707 *** 0.1088 51.9371 ***

log(ten) 0.7398 221.7444 *** 0.7741 82.0526 *** 0.7903 85.6815 ***

log(S )×log(ten) -0.0039 -3.8809 *** -0.3265 -77.0755 ***

yj1930-1931×log(S ) -0.0836 -2.4515 ** -0.0347 -0.9563 0.0138 0.4656yj1932-1933×log(S ) -0.0119 -0.5221 0.0369 1.4218 0.0165 0.7792yj1934-1935×log(S ) 0.0004 0.0226 0.0510 2.3683 ** -0.0183 -1.0144yj1936-1937×log(S ) 0.0145 0.9529 0.0642 3.2286 *** -0.0372 -2.2082 **

yj1938-1939×log(S ) 0.0297 2.2539 ** 0.0794 4.3204 *** -0.0524 -3.3172 ***

yj1940-1941×log(S ) 0.0204 1.5904 0.0709 3.8779 *** -0.0778 -4.9609 ***

yj1942-1943×log(S ) 0.0275 2.0734 ** 0.0782 4.2016 *** -0.1125 -7.0928 ***

yj1944-1945×log(S ) 0.0385 2.8024 *** 0.0888 4.7023 *** -0.1248 -7.8059 ***

yj1946-1947×log(S ) 0.0608 4.1497 *** 0.1108 5.6798 *** -0.1682 -10.3068 ***

yj1948-1949×log(S ) 0.1120 9.5726 *** 0.1644 9.2028 *** -0.1864 -12.0325 ***

yj1950-1951×log(S ) 0.1809 14.5197 *** 0.2328 12.7433 *** -0.2221 -14.1319 ***

yj1952-1953×log(S ) 0.2211 14.5233 *** 0.2727 13.4930 *** -0.2703 -16.3457 ***

yj1954-1955×log(S ) 0.2752 19.6006 *** 0.3275 16.8233 *** -0.2912 -17.9801 ***

yj1956-1957×log(S ) 0.3186 26.0797 *** 0.3704 20.4785 *** -0.3378 -21.5183 ***

yj1958-1959×log(S ) 0.3544 28.7238 *** 0.4058 22.4233 *** -0.3934 -24.9609 ***

yj1960-1961×log(S ) 0.3955 29.5031 *** 0.4469 23.7188 *** -0.4170 -26.1997 ***

yj1962-1963×log(S ) 0.4445 33.3611 *** 0.4948 26.6102 *** -0.4404 -27.7495 ***

yj1964-1965×log(S ) 0.4865 26.5974 *** 0.5384 23.7596 *** -0.4066 -24.3892 ***

yj1966-1967×log(S ) 0.6178 25.0225 *** 0.6679 23.9780 *** -0.4757 -27.5336 ***

training program dummies yes yes yestraining program dummy × log yes yes yes

dy×log(S ) No No Yes

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

⊲ Coefficients of yj19XX× S: Rapidly increasing fromthe 1950s in 6-2.

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

– Robustness check:

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

⊲ Controlling for changes in return on schoolingthroughout the period (dy× S) in 6-3.

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

■ Return on schooling is rather decreasing.

Return on schooling

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

⊲Return on

schooling

Return on career

experiences

5. Discussion

■ Return on schooling is rather decreasing.

– Return on schooling surged from the 1950s.

Return on career experiences

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

⊲Return on career

experiences

5. Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

⊲Return on career

experiences

5. Discussion

� Decrease in return on previous career experiences: Table 7.

Table 7 Change in return on previous experience7-1 7-2

c -1.5040 -38.5382 *** 0.7721 31.3067 ***

log(S ) 0.3817 22.8836 *** -0.6680 -15.8473 ***

log(ten) 0.7272 217.0572 *** 0.1594 77.5090 ***

yj1930-1931×log(pre) -0.2524 -3.2224 *** 0.4138 7.5492 ***

yj1932-1933×log(pre) -0.1702 -3.2218 *** 0.4394 12.2587 ***

yj1934-1935×log(pre) 0.0047 0.2282 0.2264 15.6921 ***

yj1936-1937×log(pre) 0.0124 0.9361 0.2323 25.8521 ***

yj1938-1939×log(pre) 0.0282 3.6060 *** 0.2260 43.4484 ***

yj1940-1941×log(pre) 0.0202 2.8682 *** 0.1929 41.9910 ***

yj1942-1943×log(pre) 0.0437 4.6432 *** 0.1793 28.9781 ***

yj1944-1945×log(pre) 0.0386 2.5344 ** 0.1679 16.4962 ***

yj1946-1947×log(pre) 0.0641 2.3179 ** 0.2087 11.9011 ***

yj1948-1949×log(pre) 0.1086 29.7683 *** 0.1211 55.8757 ***

yj1950-1951×log(pre) 0.1802 29.0458 *** 0.0885 23.4763 ***

yj1952-1953×log(pre) 0.2040 12.0810 *** 0.0598 6.0022 ***

yj1954-1955×log(pre) 0.2693 12.6736 *** 0.0115 0.9917yj1956-1957×log(pre) 0.3053 52.5736 *** 0.0060 1.8108 *

yj1958-1959×log(pre) 0.3889 37.9170 *** -0.0700 -13.3223 ***

yj1960-1961×log(pre) 0.4021 31.5316 *** -0.0710 -11.7570 ***

yj1962-1963×log(pre) 0.4687 32.8774 *** -0.0685 -11.4832 ***

yj1964-1965×log(pre) 0.3787 26.9705 *** 0.0306 4.8372 ***

yj1966-1967×log(pre) 0.7771 18.0706 *** -0.0502 -3.1390 ***

training program dummies yes yestraining program dummy × log yes yes

dy×log(S ) No Yes

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

⊲Return on career

experiences

5. Discussion

– Return appears to increase (7-1),

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

⊲Return on career

experiences

5. Discussion

– Return appears to increase (7-1), but,

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

⊲Return on career

experiences

5. Discussion

– with controlling for increase in return on schooling(interaction of cohort dummies and schooling,dy19XX× S),

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

reproduction

Skill, cont

Reproduction

experiences

Schooling, cont

Return on schooling

⊲Return on career

experiences

5. Discussion

– with controlling for increase in return on schooling(interaction of cohort dummies and schooling,dy19XX× S), sharply fell from the 1950s (7-2).

5. Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

⊲ 5. Discussion

Discussion

Discussion, cont

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

� Results:

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

� Results:

– Intermediate recruiting market was active by the 1960s.

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

� Results:

– Employees’ reproduction decision depended on moreprevious experience than on firm tenure.

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

� Results:

– Return on firm tenure gradually increased from the 1930sto the 1960s.

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

� Results:

– Selection for training programs came to be based onheight (or schooling) as a signal of innate ability from thelate 1940s.

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

� Results:

Discussion

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

⊲ Discussion

Discussion, cont

� Results:

– Return on previous career experience fell from the 1950s.

Discussion, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Discussion

⊲ Discussion, cont

Discussion, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Discussion

� Interpretation:

Discussion, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Discussion

� Interpretation:

– Extended secondary schooling replaced previous careerexperiences as an opportunity of general human capitalinvestment from the 1950s,

Discussion, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Discussion

� Interpretation:

⊲ To the “ports of entry” policy after the 1970s?

Discussion, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Discussion

� Interpretation:

– The Japanese model was occasionally formed at thecoincidence of the explosive expansion of demand forbetter educated workers and the prevalence of internallabor markets, catching up with the U.S. model.

Discussion, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Discussion

� Interpretation:

� Comparison with the German case.

Discussion, cont

1. Introduction

2. Underlining

framework

3. Existence of an

4. Wage growth in

the internal labor

market

5. Discussion

Discussion

� Interpretation:

� Comparison with the German case.

– Apprentice system seamlessly connected to compulsoryschooling (Pischke and von Wachter 2008 REStat).

Career Experiences Replacedeconseminar/20130508Nakabayashi GRIPS...Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4 Motivation, cont. – Japan is speciﬁc

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