Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 1 Career Experiences Replaced Emergence of Japanese Internal Labor Markets Masaki Nakabayashi * Seminar in Economics, National Graduate Institute for Policy Studies * Institute of Social Science, The University of Tokyo. [email protected]
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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. [email protected]
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 2
Motivation
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 3
Motivation
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 3
� Motivation.
Motivation
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 3
� 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 3
� 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4
Motivation, cont
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4
� Motivation, cont.
Motivation, cont
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4
� Motivation, cont.
– Japan is specific in
Motivation, cont
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4
� Motivation, cont.
– Japan is specific in
⊲ mid-career recruiting is inactive (contrast to the US).
Motivation, cont
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4
� Motivation, cont.
– Japan is specific in
⊲ mid-career recruiting is inactive (contrast to the US).
⊲ firm-specificity has larger impact thanindustry-specificity (contrast to Germany).
Motivation, cont
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4
� Motivation, cont.
– Japan is specific in
⊲ mid-career recruiting is inactive (contrast to the US).
⊲ firm-specificity has larger impact thanindustry-specificity (contrast to Germany).
– How the Japanese internal labor markets were formed?
Motivation, cont
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 4
� Motivation, cont.
– Japan is specific in
⊲ mid-career recruiting is inactive (contrast to the US).
⊲ firm-specificity has larger impact thanindustry-specificity (contrast to Germany).
– 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 5
Results
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 5
� Main results.
Results
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 5
� 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 5
� 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.
2. Return on firm-specific skills increased from the 1950s.
Results
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 5
� 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.
2. Return on firm-specific skills increased from the 1950s.
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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 5
� 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.
2. Return on firm-specific skills increased from the 1950s.
3. Return on schooling sharply increased and return onprevious careers decreased from the 1950s.
� Interpretation.
Results
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 5
� 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.
2. Return on firm-specific skills increased from the 1950s.
3. Return on schooling sharply increased and return onprevious careers decreased from the 1950s.
� 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 6
DeVaro and Waldman 2012
1. Introduction
2. Underlining
framework
⊲DeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
Transformation of
the Japanese steel
industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 7
DeVaro and Waldman 2012
1. Introduction
2. Underlining
framework
⊲DeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
Transformation of
the Japanese steel
industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 7
� DeVaro and Waldman 2012 JOLE.
DeVaro and Waldman 2012
1. Introduction
2. Underlining
framework
⊲DeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
Transformation of
the Japanese steel
industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 7
� DeVaro and Waldman 2012 JOLE.
– A model of internal labor markets focusing on
DeVaro and Waldman 2012
1. Introduction
2. Underlining
framework
⊲DeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
Transformation of
the Japanese steel
industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 7
� DeVaro and Waldman 2012 JOLE.
– A model of internal labor markets focusing on
⊲ Employer learning asymmetric between current andpotential employers.
DeVaro and Waldman 2012
1. Introduction
2. Underlining
framework
⊲DeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
Transformation of
the Japanese steel
industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 7
� DeVaro and Waldman 2012 JOLE.
– A model of internal labor markets focusing on
⊲ 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 8
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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 8
� A lemma deduced from DeVaro and Waldman 2012.
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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 8
� A lemma deduced from DeVaro and Waldman 2012.
– If employer learning is asymmetric and return onfirm-specific skill is strictly positive, cohort effects arepersistent (Lemma 1).
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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 8
� A lemma deduced from DeVaro and Waldman 2012.
– If employer learning is asymmetric and return onfirm-specific skill is strictly positive, cohort effects arepersistent (Lemma 1).
⊲ exogenous shocks, with consideration of possibleinsurance function of internal labor markets (Beaudryand DiNardo 1991 JPE).
⊲ 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
Waldman 2012Asymmetric learning
and firm-specific skill
⊲
Transformation
of the Japanese
steel industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 9
Transformation of the Japanese steel industry
1. Introduction
2. Underlining
frameworkDeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
⊲
Transformation
of the Japanese
steel industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 9
� Japanese manufacturing began to form internal labormarkets in the 1920s, as in the US.
Transformation of the Japanese steel industry
1. Introduction
2. Underlining
frameworkDeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
⊲
Transformation
of the Japanese
steel industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 9
� Japanese manufacturing began to form internal labormarkets in the 1920s, as in the US.
� Technology-skill/education complementary development(Goldin and Katz 2008) from the 1950s, as the steel industryexperienced massive modernization investment.
Transformation of the Japanese steel industry
1. Introduction
2. Underlining
frameworkDeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
⊲
Transformation
of the Japanese
steel industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 9
� Japanese manufacturing began to form internal labormarkets in the 1920s, as in the US.
� Technology-skill/education complementary development(Goldin and Katz 2008) from the 1950s, as the steel industryexperienced massive modernization investment.
– Systematic production lines required general cognitiveskills and understandings of firm-specific systems.
Transformation of the Japanese steel industry
1. Introduction
2. Underlining
frameworkDeVaro and
Waldman 2012Asymmetric learning
and firm-specific skill
⊲
Transformation
of the Japanese
steel industry
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 9
� Japanese manufacturing began to form internal labormarkets in the 1920s, as in the US.
� Technology-skill/education complementary development(Goldin and Katz 2008) from the 1950s, as the steel industryexperienced massive modernization investment.
– 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
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 10
Case establishment and data
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
⊲
Case
establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 11
� 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.
Case establishment and data
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
⊲
Case
establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 11
� 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.
– Schooling and physiological characteristics whenrecruited, previous career experiences, and panel data ofwage, job assignments, promotion, family composition,and clinical history are included.
Case establishment and data
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
⊲
Case
establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 11
� 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.
– Schooling and physiological characteristics whenrecruited, previous career experiences, and panel data ofwage, job assignments, promotion, family composition,and clinical history are included.
– Composition of cohorts (Table 1).
Case establishment and data
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
⊲
Case
establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 11
� 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.
– Schooling and physiological characteristics whenrecruited, previous career experiences, and panel data ofwage, job assignments, promotion, family composition,and clinical history are included.
– 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
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 12
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
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 12
� Indicators of internal labor markets.
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
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 12
� Indicators of internal labor markets.
– Persistent cohort effects,
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
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 12
� Indicators of internal labor markets.
– 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
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
– previous work experience (pre),
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
– previous work experience (pre),
– interactions of pre with the previous same industrydummy (pre× ibs)
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
– previous work experience (pre),
– 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
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
– previous work experience (pre),
– interactions of pre with the previous same industrydummy (pre× ibs) and with the previous same jobdummy (pre× jbs),
– tenure at the case firm (ten),
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
– previous work experience (pre),
– interactions of pre with the previous same industrydummy (pre× ibs) and with the previous same jobdummy (pre× jbs),
– tenure at the case firm (ten),
– 2-year joined dummies (yj1928− 1929, yj1930− 1931,...),
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
– previous work experience (pre),
– interactions of pre with the previous same industrydummy (pre× ibs) and with the previous same jobdummy (pre× jbs),
– tenure at the case firm (ten),
– 2-year joined dummies (yj1928− 1929, yj1930− 1931,...),
– ten× yj19XX,
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 13
� Table 2: Regression of real wage (rw) on
– years of schooling (S),
– previous work experience (pre),
– interactions of pre with the previous same industrydummy (pre× ibs) and with the previous same jobdummy (pre× jbs),
– tenure at the case firm (ten),
– 2-year joined dummies (yj1928− 1929, yj1930− 1931,...),
– ten× yj19XX,
– with controlling for year dummies and growth rate ofGNE (∆rgne).
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 14
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 14
� Table 2, cont.
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 14
� Table 2, cont.
– Cohort effects survive in all cohorts (model 2-1 in Table
2).
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
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 15
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 15
� 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
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 15
� 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:
– 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
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 15
� 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:
– The firm’s evaluation of unobservable ability of eachworker converged to a unique fixed point.
– Toward the true abilities, the firm was learning.
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 15
� 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:
– The firm’s evaluation of unobservable ability of eachworker converged to a unique fixed point.
– 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
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 16
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 16
� Wage profiles: Maximum (Figure 1), medium (Figure 2),and minimum (Figure 3) in cohorts.
14
Figure 1 Wage curves of two consectuve cohort year groups:Mean in each calender year
12
8
10
955
pric
e
6
8
y re
al w
age
in 1
9
4
Dai
ly
0
2
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
year
14
Figure 2 Wage curves of two consecutive cohort year groups: Maximum in each calender yeaar
12
10
pric
e
6
8
aily
wag
e in
195
5
4
Rea
l da
2
0
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
year
14
Figure 3 Wage curves of two consecutive cohort year groups: Minimum in each calender year
12
14
10
55 p
rice
6
8
daily
wag
e in
195
4
Rea
l
0
2
0
1929
1930
1931
1932
1933
1934
1935
1936
1937
1938
1939
1940
1941
1942
1943
1944
1945
1946
1947
1948
1949
1950
1951
1952
1953
1954
1955
1956
1957
1958
1959
1960
1961
1962
1963
1964
1965
1966
1967
1968
1969
year
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 16
� 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
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 17
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 17
� 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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 17
� Increasing coefficient of tenure (ten) as cohorts come downin model 2-2, Table 2.
– Increasing return on firm-specific human capital, withcontrolling for
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 17
� Increasing coefficient of tenure (ten) as cohorts come downin model 2-2, Table 2.
– Increasing return on firm-specific human capital, withcontrolling for
⊲ GNE growth rate (∆rgne),
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 17
� Increasing coefficient of tenure (ten) as cohorts come downin model 2-2, Table 2.
– Increasing return on firm-specific human capital, withcontrolling for
⊲ GNE growth rate (∆rgne),
⊲ cohort effects (yj19XX),
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 17
� Increasing coefficient of tenure (ten) as cohorts come downin model 2-2, Table 2.
– Increasing return on firm-specific human capital, withcontrolling for
⊲ GNE growth rate (∆rgne),
⊲ cohort effects (yj19XX),
⊲ schooling as general human capital (S),
Existence, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor marketCase establishment
and dataExistence of internal
labor market and its
change
Existence, cont
Existence, cont
Existence, cont
Existence, cont
⊲ Existence, cont
4. Wage growth in
the internal labor
market
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 17
� Increasing coefficient of tenure (ten) as cohorts come downin model 2-2, Table 2.
– Increasing return on firm-specific human capital, withcontrolling for
⊲ GNE growth rate (∆rgne),
⊲ cohort effects (yj19XX),
⊲ 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
internal labor market
⊲
4. Wage growth
in the internal
labor marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 18
Skill, wage and reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
⊲Skill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 19
Skill, wage and reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
⊲Skill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 19
� Impact of human capital investment (Table 3): Regressionof real wage (rw) on
Skill, wage and reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
⊲Skill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 19
� Impact of human capital investment (Table 3): Regressionof real wage (rw) on
– height (hgt), years of schooling (S),
Skill, wage and reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
⊲Skill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 19
� Impact of human capital investment (Table 3): Regressionof real wage (rw) on
– height (hgt), years of schooling (S),
– previous work experience (pre) and previous employment(pem),
Skill, wage and reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
⊲Skill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 19
� Impact of human capital investment (Table 3): Regressionof real wage (rw) on
– height (hgt), years of schooling (S),
– previous work experience (pre) and previous employment(pem),
– the same previous industry dummy (ibs× pem) and thesame previous job dummy (jbs× pem),
Skill, wage and reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
⊲Skill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 19
� Impact of human capital investment (Table 3): Regressionof real wage (rw) on
– height (hgt), years of schooling (S),
– previous work experience (pre) and previous employment(pem),
– the same previous industry dummy (ibs× pem) and thesame previous job dummy (jbs× pem),
– tenure (ten),
Skill, wage and reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
⊲Skill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 19
� Impact of human capital investment (Table 3): Regressionof real wage (rw) on
– height (hgt), years of schooling (S),
– previous work experience (pre) and previous employment(pem),
– the same previous industry dummy (ibs× pem) and thesame previous job dummy (jbs× pem),
– 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
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
⊲ Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
Skill, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
⊲ Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
� 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
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
� Impact of human capital investment (Table 3), cont.
– Positive impact of general human capital:
Skill, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
⊲ Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
� Impact of human capital investment (Table 3), cont.
– Positive impact of general human capital:
⊲ hgt, S, pre.
Skill, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
⊲ Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
� Impact of human capital investment (Table 3), cont.
– Positive impact of general human capital:
⊲ hgt, S, pre.
– Industry-specificity did matter.
Skill, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
⊲ Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
� Impact of human capital investment (Table 3), cont.
– Positive impact of general human capital:
⊲ hgt, S, pre.
– Industry-specificity did matter.
⊲ ibs× pem.
Skill, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
⊲ Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
� Impact of human capital investment (Table 3), cont.
– Positive impact of general human capital:
⊲ hgt, S, pre.
– Industry-specificity did matter.
⊲ ibs× pem.
– Large impact of firm-specific human capital:
Skill, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
⊲ Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 20
� Impact of human capital investment (Table 3), cont.
– Positive impact of general human capital:
⊲ hgt, S, pre.
– Industry-specificity did matter.
⊲ ibs× pem.
– Large impact of firm-specific human capital:
⊲ ten.
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).
– 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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).
– and real wage (rw).
– Positive coefficients of hgt, pre, ten as well as rw.
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).
– and real wage (rw).
– Positive coefficients of hgt, pre, ten as well as rw.
⊲ Human capital components had positive impactsindependently from current wage.
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).
– and real wage (rw).
– Positive coefficients of hgt, pre, ten as well as rw.
⊲ Human capital components had positive impactsindependently from current wage.
■ Expected future revenue was critical as well.
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).
– and real wage (rw).
– Positive coefficients of hgt, pre, ten as well as rw.
⊲ Human capital components had positive impactsindependently from current wage.
■ Expected future revenue was critical as well.
⊲ Job security at the firm ten was not dominant.
Reproduction
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
⊲ Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 21
� Reproduction decisions (Table 4): Regressing the number ofchildren (nos) on
– Human capital components,
⊲ height (hgt), schooling (S), previous work experience(pre), the firm tenure (ten).
– and real wage (rw).
– Positive coefficients of hgt, pre, ten as well as rw.
⊲ Human capital components had positive impactsindependently from current wage.
■ Expected future revenue was critical as well.
⊲ 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
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
⊲
Schooling and
career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 22
Schooling and career experiences
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
⊲
Schooling and
career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 22
� Changes in training programs (models 3-1 and 3-2 in Table
3).
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
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
⊲ Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
⊲ By the middle 1940s (dcy, sy, dct):
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
⊲ Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
⊲ By the middle 1940s (dcy, sy, dct):
■ More likely accepted shorter employees.
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
⊲ Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
⊲ By the middle 1940s (dcy, sy, dct):
■ More likely accepted shorter employees.
⊲ From the late 1940s (dc):
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
⊲ Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
⊲ By the middle 1940s (dcy, sy, dct):
■ More likely accepted shorter employees.
⊲ From the late 1940s (dc):
■ More likely accepted taller employees.
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
⊲ Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
⊲ By the middle 1940s (dcy, sy, dct):
■ More likely accepted shorter employees.
⊲ From the late 1940s (dc):
■ More likely accepted taller employees.
– Previous work experience and employment:
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
⊲ Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
⊲ By the middle 1940s (dcy, sy, dct):
■ More likely accepted shorter employees.
⊲ From the late 1940s (dc):
■ More likely accepted taller employees.
– Previous work experience and employment:
⊲ From the middle 1940s (dct, dc):
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
⊲ Schooling, cont
Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 24
� Table 5: Selection for training programs.
– Height:
⊲ By the middle 1940s (dcy, sy, dct):
■ More likely accepted shorter employees.
⊲ From the late 1940s (dc):
■ More likely accepted taller employees.
– Previous work experience and employment:
⊲ From the middle 1940s (dct, dc):
■ More likely accepted employees with less previousexperience.
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
⊲ Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 25
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
⊲ Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 25
� Table 5 and Table 3: Selection for training programs, cont.
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
⊲ Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 25
� Table 5 and Table 3: Selection for training programs, cont.
– From the late 1940s.
Schooling, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
⊲ Schooling, cont
Return on schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 25
� Table 5 and Table 3: Selection for training programs, cont.
– 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
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
Return on schooling
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
Return on schooling
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S),
Return on schooling
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
– 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 ***
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
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S), with controlling for employerlearning effect (S × ten).
⊲ Coefficients of yj19XX× S: Rapidly increasing fromthe 1950s in 6-2.
Return on schooling
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S), with controlling for employerlearning effect (S × ten).
⊲ Coefficients of yj19XX× S: Rapidly increasing fromthe 1950s in 6-2.
– Robustness check:
Return on schooling
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S), with controlling for employerlearning effect (S × ten).
⊲ Coefficients of yj19XX× S: Rapidly increasing fromthe 1950s in 6-2.
– Robustness check:
⊲ 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
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S), with controlling for employerlearning effect (S × ten).
⊲ Coefficients of yj19XX× S: Rapidly increasing fromthe 1950s in 6-2.
– Robustness check:
⊲ Controlling for changes in return on schoolingthroughout the period (dy× S) in 6-3.
■ Return on schooling is rather decreasing.
Return on schooling
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
⊲Return on
schooling
Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 26
� Return on schooling (Table 6): Regressing real wage (rw) on
– interaction of 2-year cohort dummy and years ofschooling (yj19XX× S), with controlling for employerlearning effect (S × ten).
⊲ Coefficients of yj19XX× S: Rapidly increasing fromthe 1950s in 6-2.
– Robustness check:
⊲ Controlling for changes in return on schoolingthroughout the period (dy× S) in 6-3.
■ 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
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
⊲Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 27
Return on career experiences
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
⊲Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 27
� Decrease in return on previous career experiences: Table 7.
Table 7 Change in return on previous experience7-1 7-2
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
training program dummies yes yestraining program dummy × log yes yes
dy×log(S ) No Yes
Return on career experiences
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
⊲Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 27
� Decrease in return on previous career experiences: Table 7.
– Return appears to increase (7-1),
Return on career experiences
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
⊲Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 27
� Decrease in return on previous career experiences: Table 7.
– Return appears to increase (7-1), but,
Return on career experiences
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
⊲Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 27
� Decrease in return on previous career experiences: Table 7.
– Return appears to increase (7-1), but,
– with controlling for increase in return on schooling(interaction of cohort dummies and schooling,dy19XX× S),
Return on career experiences
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
marketSkill, wage and
reproduction
Skill, cont
Reproduction
Schooling and career
experiences
Schooling, cont
Schooling, cont
Schooling, cont
Return on schooling
⊲Return on career
experiences
5. Discussion
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 27
� Decrease in return on previous career experiences: Table 7.
– Return appears to increase (7-1), but,
– 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
internal labor market
4. Wage growth in
the internal labor
market
⊲ 5. Discussion
Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 28
Discussion
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
Discussion
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
� Results:
Discussion
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
� Results:
– Intermediate recruiting market was active by the 1960s.
Discussion
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
� Results:
– Intermediate recruiting market was active by the 1960s.
– Employees’ reproduction decision depended on moreprevious experience than on firm tenure.
Discussion
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
� Results:
– Intermediate recruiting market was active by the 1960s.
– Employees’ reproduction decision depended on moreprevious experience than on firm tenure.
– Return on firm tenure gradually increased from the 1930sto the 1960s.
Discussion
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
� Results:
– Intermediate recruiting market was active by the 1960s.
– Employees’ reproduction decision depended on moreprevious experience than on firm tenure.
– Return on firm tenure gradually increased from the 1930sto the 1960s.
– 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
� Results:
– Intermediate recruiting market was active by the 1960s.
– Employees’ reproduction decision depended on moreprevious experience than on firm tenure.
– Return on firm tenure gradually increased from the 1930sto the 1960s.
– Selection for training programs came to be based onheight (or schooling) as a signal of innate ability from thelate 1940s.
– Return on schooling surged from the 1950s.
Discussion
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
⊲ Discussion
Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 29
� Results:
– Intermediate recruiting market was active by the 1960s.
– Employees’ reproduction decision depended on moreprevious experience than on firm tenure.
– Return on firm tenure gradually increased from the 1930sto the 1960s.
– Selection for training programs came to be based onheight (or schooling) as a signal of innate ability from thelate 1940s.
– Return on schooling surged from the 1950s.
– Return on previous career experience fell from the 1950s.
Discussion, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Discussion
⊲ Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 30
Discussion, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Discussion
⊲ Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 30
� Interpretation:
Discussion, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Discussion
⊲ Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 30
� 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Discussion
⊲ Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 30
� Interpretation:
– Extended secondary schooling replaced previous careerexperiences as an opportunity of general human capitalinvestment from the 1950s,
⊲ To the “ports of entry” policy after the 1970s?
Discussion, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Discussion
⊲ Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 30
� Interpretation:
– Extended secondary schooling replaced previous careerexperiences as an opportunity of general human capitalinvestment from the 1950s,
⊲ To the “ports of entry” policy after the 1970s?
– 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
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Discussion
⊲ Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 30
� Interpretation:
– Extended secondary schooling replaced previous careerexperiences as an opportunity of general human capitalinvestment from the 1950s,
⊲ To the “ports of entry” policy after the 1970s?
– 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.
� Comparison with the German case.
Discussion, cont
1. Introduction
2. Underlining
framework
3. Existence of an
internal labor market
4. Wage growth in
the internal labor
market
5. Discussion
Discussion
⊲ Discussion, cont
Career Experiences Replaced GRIPS Seminar in Economics, May 8, 2013 – slide 30
� Interpretation:
– Extended secondary schooling replaced previous careerexperiences as an opportunity of general human capitalinvestment from the 1950s,
⊲ To the “ports of entry” policy after the 1970s?
– 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.
� Comparison with the German case.
– Apprentice system seamlessly connected to compulsoryschooling (Pischke and von Wachter 2008 REStat).