Career Experiences Replaced Emergence of Japanese Internal Labor - - PowerPoint PPT Presentation

SLIDE 1

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. mn@iss.u-tokyo.ac.jp

SLIDE 2

• 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

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

SLIDE 4

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.

SLIDE 5

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 of an internal labor market practice focusing on new graduates (“ports of entry”).

SLIDE 6

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 of an internal labor market practice focusing on new graduates (“ports of entry”).

–

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

SLIDE 7

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

SLIDE 8

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.

SLIDE 9

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

SLIDE 10

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).

SLIDE 11

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 than industry-specificity (contrast to Germany).

SLIDE 12

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 than industry-specificity (contrast to Germany).

–

How the Japanese internal labor markets were formed?

SLIDE 13

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 than industry-specificity (contrast to Germany).

–

How the Japanese internal labor markets were formed?

⊲

Study of internal labor market formation at a Japanese iron works, 1929-1969.

SLIDE 14

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

SLIDE 15

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.

SLIDE 16

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 been enhanced from the 1930s, mid-career recruiting was active by the end of the 1960s.

SLIDE 17

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 been enhanced from the 1930s, mid-career recruiting was active by the end of the 1960s. 2. Return on firm-specific skills increased from the 1950s.

SLIDE 18

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 been enhanced from the 1930s, mid-career recruiting was active by the end of the 1960s. 2. Return on firm-specific skills increased from the 1950s. 3. Return on schooling sharply increased and return on previous careers decreased from the 1950s.

SLIDE 19

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 been enhanced from the 1930s, mid-career recruiting was active by the end of the 1960s. 2. Return on firm-specific skills increased from the 1950s. 3. Return on schooling sharply increased and return on previous careers decreased from the 1950s.

• Interpretation.

SLIDE 20

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 been enhanced from the 1930s, mid-career recruiting was active by the end of the 1960s. 2. Return on firm-specific skills increased from the 1950s. 3. Return on schooling sharply increased and return on previous careers decreased from the 1950s.

• Interpretation.

–

Extended schooling supplanted mid-career experiences after the 1970s, and then the contemporary Japanese internal labor markets were formed.

SLIDE 21

• 2. Underlining framework
• 1. Introduction

⊲

• 2. Underlining

framework DeVaro 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 6

SLIDE 22

DeVaro and Waldman 2012

• 1. Introduction
• 2. Underlining

framework

⊲

DeVaro 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 7

SLIDE 23

DeVaro and Waldman 2012

• 1. Introduction
• 2. Underlining

framework

⊲

DeVaro 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 7

• DeVaro and Waldman 2012 JOLE.

SLIDE 24

DeVaro and Waldman 2012

• 1. Introduction
• 2. Underlining

framework

⊲

DeVaro 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 7

• DeVaro and Waldman 2012 JOLE.

–

A model of internal labor markets focusing on

SLIDE 25

DeVaro and Waldman 2012

• 1. Introduction
• 2. Underlining

framework

⊲

DeVaro 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 7

• DeVaro and Waldman 2012 JOLE.

–

A model of internal labor markets focusing on

⊲

Employer learning asymmetric between current and potential employers.

SLIDE 26

DeVaro and Waldman 2012

• 1. Introduction
• 2. Underlining

framework

⊲

DeVaro 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 7

• DeVaro and Waldman 2012 JOLE.

–

A model of internal labor markets focusing on

⊲

Employer learning asymmetric between current and potential employers.

⊲

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

SLIDE 27

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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

SLIDE 28

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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.

SLIDE 29

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

SLIDE 30

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

SLIDE 31

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

• Testing existence of internal labor markets.

SLIDE 32

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

• Testing existence of internal labor markets.

–

Cohort effects with

SLIDE 33

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

• Testing existence of internal labor markets.

–

Cohort effects with controlling for,

SLIDE 34

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

• Testing existence of internal labor markets.

–

Cohort effects with controlling for,

⊲

exogenous shocks,

SLIDE 35

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

• Testing existence of internal labor markets.

–

Cohort effects with controlling for,

⊲

exogenous shocks, with consideration of possible insurance function of internal labor markets (Beaudry and DiNardo 1991 JPE).

SLIDE 36

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

• Testing existence of internal labor markets.

–

Cohort effects with controlling for,

⊲

exogenous shocks, with consideration of possible insurance function of internal labor markets (Beaudry and DiNardo 1991 JPE).

⊲

return on task-specific skill,

SLIDE 37

Asymmetric learning and firm-specific skill

• 1. Introduction
• 2. Underlining

framework DeVaro 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 on firm-specific skill is strictly positive, cohort effects are persistent (Lemma 1).

–

Internal labor markets consisting of asymmetric learning and firm-specific skill acquisition.

• Testing existence of internal labor markets.

–

Cohort effects with controlling for,

⊲

exogenous shocks, with consideration of possible insurance function of internal labor markets (Beaudry and DiNardo 1991 JPE).

⊲

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

SLIDE 38

Transformation of the Japanese steel industry

• 1. Introduction
• 2. Underlining

framework DeVaro and Waldman 2012 Asymmetric learning and firm-specific skill

⊲

Transformation

• f 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

SLIDE 39

Transformation of the Japanese steel industry

• 1. Introduction
• 2. Underlining

framework DeVaro and Waldman 2012 Asymmetric learning and firm-specific skill

⊲

Transformation

• f 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 labor

markets in the 1920s, as in the US.

SLIDE 40

Transformation of the Japanese steel industry

• 1. Introduction
• 2. Underlining

framework DeVaro and Waldman 2012 Asymmetric learning and firm-specific skill

⊲

Transformation

• f 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 labor

markets in the 1920s, as in the US.

• Technology-skill/education complementary development

(Goldin and Katz 2008) from the 1950s, as the steel industry experienced massive modernization investment.

SLIDE 41

Transformation of the Japanese steel industry

• 1. Introduction
• 2. Underlining

framework DeVaro and Waldman 2012 Asymmetric learning and firm-specific skill

⊲

Transformation

• f 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 labor

markets in the 1920s, as in the US.

• Technology-skill/education complementary development

(Goldin and Katz 2008) from the 1950s, as the steel industry experienced massive modernization investment.

–

Systematic production lines required general cognitive skills and understandings of firm-specific systems.

SLIDE 42

Transformation of the Japanese steel industry

• 1. Introduction
• 2. Underlining

framework DeVaro and Waldman 2012 Asymmetric learning and firm-specific skill

⊲

Transformation

• f 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 labor

markets in the 1920s, as in the US.

• Technology-skill/education complementary development

(Goldin and Katz 2008) from the 1950s, as the steel industry experienced massive modernization investment.

–

Systematic production lines required general cognitive skills and understandings of firm-specific systems.

–

Seeking better educated workers, and enhancing internal labor markets from the 1950s.

SLIDE 43

• 3. Existence of an internal labor market
• 1. Introduction
• 2. Underlining

framework

⊲

• 3. Existence of

an internal labor market Case 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 10

SLIDE 44

Case establishment and data

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market

⊲

Case 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 11

• This research uses original wage records of 1557 workers who

joined the case iron works from 1928 to 1967 and were relocated to another iron works in the late 1960s.

SLIDE 45

Case establishment and data

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market

⊲

Case 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 11

• This research uses original wage records of 1557 workers who

joined the case iron works from 1928 to 1967 and were relocated to another iron works in the late 1960s.

–

Schooling and physiological characteristics when recruited, previous career experiences, and panel data of wage, job assignments, promotion, family composition, and clinical history are included.

SLIDE 46

Case establishment and data

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market

⊲

Case 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 11

• This research uses original wage records of 1557 workers who

joined the case iron works from 1928 to 1967 and were relocated to another iron works in the late 1960s.

–

Schooling and physiological characteristics when recruited, previous career experiences, and panel data of wage, job assignments, promotion, family composition, and clinical history are included.

–

Composition of cohorts (Table 1).

SLIDE 47

Case establishment and data

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market

⊲

Case 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 11

• This research uses original wage records of 1557 workers who

joined the case iron works from 1928 to 1967 and were relocated to another iron works in the late 1960s.

–

Schooling and physiological characteristics when recruited, previous career experiences, and panel data of wage, 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.

SLIDE 48

Existence of internal labor market and its change

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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

SLIDE 49

Existence of internal labor market and its change

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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.

SLIDE 50

Existence of internal labor market and its change

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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,

SLIDE 51

Existence of internal labor market and its change

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 for industry-/job- specific skills and GNE growth rate (Lemma 1).

SLIDE 52

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

SLIDE 53

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

SLIDE 54

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

SLIDE 55

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

–

previous work experience (pre),

SLIDE 56

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

–

previous work experience (pre),

–

interactions of pre with the previous same industry dummy (pre × ibs)

SLIDE 57

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

–

previous work experience (pre),

–

interactions of pre with the previous same industry dummy (pre × ibs) and with the previous same job dummy (pre × jbs),

SLIDE 58

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

–

previous work experience (pre),

–

interactions of pre with the previous same industry dummy (pre × ibs) and with the previous same job dummy (pre × jbs),

–

tenure at the case firm (ten),

SLIDE 59

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

–

previous work experience (pre),

–

interactions of pre with the previous same industry dummy (pre × ibs) and with the previous same job dummy (pre × jbs),

–

tenure at the case firm (ten),

–

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

SLIDE 60

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

–

previous work experience (pre),

–

interactions of pre with the previous same industry dummy (pre × ibs) and with the previous same job dummy (pre × jbs),

–

tenure at the case firm (ten),

–

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

–

ten × yj19XX,

SLIDE 61

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 13

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

–

years of schooling (S),

–

previous work experience (pre),

–

interactions of pre with the previous same industry dummy (pre × ibs) and with the previous same job dummy (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 of GNE (∆rgne).

SLIDE 62

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 14

SLIDE 63

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 14

• Table 2, cont.

SLIDE 64

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 14

• Table 2, cont.

–

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

SLIDE 65

Table 2 Effect of cohort and tenure 2-1 Estimation method panel least squares Dependent 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 yes Δrgne yes

SLIDE 66

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 15

SLIDE 67

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 15

• Wage residuals ([[observed real wage (rw)] − [real wage

estimated from observables with models 3-1 and 3-3 in Table 3 (E[rw])]]) reject panel unit root tests:

SLIDE 68

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 15

• Wage residuals ([[observed real wage (rw)] − [real wage

estimated from observables with models 3-1 and 3-3 in Table 3 (E[rw])]]) reject panel unit root tests:

–

The firm’s evaluation of unobservable ability of each worker converged to a unique fixed point.

SLIDE 69

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 15

• Wage residuals ([[observed real wage (rw)] − [real wage

estimated from observables with models 3-1 and 3-3 in Table 3 (E[rw])]]) reject panel unit root tests:

–

The firm’s evaluation of unobservable ability of each worker converged to a unique fixed point.

–

Toward the true abilities, the firm was learning.

SLIDE 70

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 15

• Wage residuals ([[observed real wage (rw)] − [real wage

estimated from observables with models 3-1 and 3-3 in Table 3 (E[rw])]]) reject panel unit root tests:

–

The firm’s evaluation of unobservable ability of each worker converged to a unique fixed point.

–

Toward the true abilities, the firm was learning.

–

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

SLIDE 71

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 16

SLIDE 72

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 16

• Wage profiles: Maximum (Figure 1), medium (Figure 2),

and minimum (Figure 3) in cohorts.

SLIDE 73

14

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

12 8 10 955 price 6 8 y real wage in 19 4 Daily 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

SLIDE 74

14

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

12 10 price 6 8 aily wage in 1955 4 Real da 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

SLIDE 75

14

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

12 14 10 55 price 6 8 daily wage in 195 4 Real 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

SLIDE 76

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 16

• Wage profiles: Maximum (Figure 1), medium (Figure 2),

and minimum (Figure 3) in cohorts.

–

“Predictable winners and losers” shown in suppressed wages of “losers”.

SLIDE 77

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 17

SLIDE 78

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 17

• Increasing coefficient of tenure (ten) as cohorts come down

in model 2-2, Table 2.

SLIDE 79

Table 2 Effect of cohort and tenure, cont. 2-2 Estimation method panel least squares Dependent 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
• 1.4496

yj1932-1933×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 yes year joined dummies yes Δrgnp yes

SLIDE 80

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 17

• Increasing coefficient of tenure (ten) as cohorts come down

in model 2-2, Table 2.

–

Increasing return on firm-specific human capital, with controlling for

SLIDE 81

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 17

• Increasing coefficient of tenure (ten) as cohorts come down

in model 2-2, Table 2.

–

Increasing return on firm-specific human capital, with controlling for

⊲

GNE growth rate (∆rgne),

SLIDE 82

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 17

• Increasing coefficient of tenure (ten) as cohorts come down

in model 2-2, Table 2.

–

Increasing return on firm-specific human capital, with controlling for

⊲

GNE growth rate (∆rgne),

⊲

cohort effects (yj19XX),

SLIDE 83

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 17

• Increasing coefficient of tenure (ten) as cohorts come down

in model 2-2, Table 2.

–

Increasing return on firm-specific human capital, with controlling for

⊲

GNE growth rate (∆rgne),

⊲

cohort effects (yj19XX),

⊲

schooling as general human capital (S),

SLIDE 84

Existence, cont

• 1. Introduction
• 2. Underlining

framework

• 3. Existence of an

internal labor market Case 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 17

• Increasing coefficient of tenure (ten) as cohorts come down

in model 2-2, Table 2.

–

Increasing return on firm-specific human capital, with controlling for

⊲

GNE growth rate (∆rgne),

⊲

cohort effects (yj19XX),

⊲

schooling as general human capital (S),

⊲

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

SLIDE 85

• 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 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 18

SLIDE 86

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

SLIDE 87

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): Regression
• f real wage (rw) on

SLIDE 88

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): Regression
• f real wage (rw) on

–

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

SLIDE 89

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): Regression
• f real wage (rw) on

–

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

–

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

SLIDE 90

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): Regression
• f 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 the same previous job dummy (jbs × pem),

SLIDE 91

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): Regression
• f 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 the same previous job dummy (jbs × pem),

–

tenure (ten),

SLIDE 92

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): Regression
• f 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 the same 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.

SLIDE 93

Skill, cont

• 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 20

SLIDE 94

Skill, cont

• 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 20

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

SLIDE 95

Table 3 Wage regression 3-1 3-2 Estimation method panel extended generalized least squares Dependent variable log(rw) log(rw) Cross-section random effect random effect Period (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

***

SLIDE 96

Table 3 Wage regression, cont. 3-3 3-4 Estimation method panel extended generalized least squares Dependent variable log(rw) log(rw) Cross-section random effect random effect Period (year) pooled (no control) pooled (no control) Independent variables coefficient t statistic coefficient t statistic 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 0.5040 log(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

***

SLIDE 97

Skill, cont

• 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 20

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

–

Positive impact of general human capital:

SLIDE 98

Skill, cont

• 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 20

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

–

Positive impact of general human capital:

⊲

hgt, S, pre.

SLIDE 99

Skill, cont

• 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 20

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

–

Positive impact of general human capital:

⊲

hgt, S, pre.

–

Industry-specificity did matter.

SLIDE 100

Skill, cont

• 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 20

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

–

Positive impact of general human capital:

⊲

hgt, S, pre.

–

Industry-specificity did matter.

⊲

ibs × pem.

SLIDE 101

Skill, cont

• 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 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:

SLIDE 102

Skill, cont

• 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 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.

SLIDE 103

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 21

SLIDE 104

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (nos) on

SLIDE 105

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (nos) on

–

Human capital components,

SLIDE 106

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (nos) on

–

Human capital components,

⊲

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

SLIDE 107

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (nos) on

–

Human capital components,

⊲

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

–

and real wage (rw).

SLIDE 108

Table 4 Fertility decision by employees. 4-1 4-2 Estimation method panel extended generalized least squares Dependent variable log(noc) log(noc) Cross-section pooled (no control ) random effect Period (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
• 0.4104

log(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

***

SLIDE 109

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (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.

SLIDE 110

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (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 impacts independently from current wage.

SLIDE 111

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (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 impacts independently from current wage.

■

Expected future revenue was critical as well.

SLIDE 112

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (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 impacts independently from current wage.

■

Expected future revenue was critical as well.

⊲

Job security at the firm ten was not dominant.

SLIDE 113

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 21

• Reproduction decisions (Table 4): Regressing the number of

children (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 impacts independently 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.

SLIDE 114

Schooling and career experiences

• 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 22

SLIDE 115

Schooling and career experiences

• 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 22

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

3).

SLIDE 116

Table 3 Wage regression 3-1 3-2 Estimation method panel extended generalized least squares Dependent variable log(rw) log(rw) Cross-section random effect random effect Period (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

***

SLIDE 117

Schooling and career experiences

• 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 22

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

3).

–

By the middle 1940s (dcy, sy, dct).

SLIDE 118

Schooling and career experiences

• 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 22

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

3).

–

By the middle 1940s (dcy, sy, dct).

⊲

Negative coefficients of the training program dummies: dcy, sy, dct

SLIDE 119

Schooling and career experiences

• 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 22

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

3).

–

By the middle 1940s (dcy, sy, dct).

⊲

Negative coefficients of the training program dummies: dcy, sy, dct

⊲

Positive coefficients of interactions with work experience: dcy × ten, sy × ten, dct × ten.

SLIDE 120

Schooling and career experiences

• 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 22

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

3).

–

By the middle 1940s (dcy, sy, dct).

⊲

Negative coefficients of the training program dummies: dcy, sy, dct

⊲

Positive coefficients of interactions with work experience: dcy × ten, sy × ten, dct × ten.

■

Less productive employees were selected for training.

SLIDE 121

Schooling and career experiences

• 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 22

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

3).

–

By the middle 1940s (dcy, sy, dct).

⊲

Negative coefficients of the training program dummies: dcy, sy, dct

⊲

Positive coefficients of interactions with work experience: dcy × ten, sy × ten, dct × ten.

■

Less productive employees were selected for training.

■

Training programs and work experience were complements.

SLIDE 122

Schooling, cont

• 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 23

SLIDE 123

Schooling, cont

• 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 23

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

SLIDE 124

Schooling, cont

• 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 23

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

–

From the late 1940s (dc).

SLIDE 125

Schooling, cont

• 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 23

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

–

From the late 1940s (dc).

⊲

Positive coefficient of the training program dummy: dc.

SLIDE 126

Schooling, cont

• 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 23

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

–

From the late 1940s (dc).

⊲

Positive coefficient of the training program dummy: dc.

⊲

Negative coefficient of interaction with tenure: dc × ten.

SLIDE 127

Schooling, cont

• 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 23

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

–

From the late 1940s (dc).

⊲

Positive coefficient of the training program dummy: dc.

⊲

Negative coefficient of interaction with tenure: dc × ten.

■

More productive employees were selected for training.

SLIDE 128

Schooling, cont

• 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 23

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

–

From the late 1940s (dc).

⊲

Positive coefficient of the training program dummy: dc.

⊲

Negative coefficient of interaction with tenure: dc × ten.

■

More productive employees were selected for training.

■

Training program and experience became less complementary

SLIDE 129

Schooling, cont

• 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 23

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

–

From the late 1940s (dc).

⊲

Positive coefficient of the training program dummy: dc.

⊲

Negative coefficient of interaction with tenure: dc × ten.

■

More productive employees were selected for training.

■

Training program and experience became less complementary and/or

SLIDE 130

Schooling, cont

• 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 23

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

–

From the late 1940s (dc).

⊲

Positive coefficient of the training program dummy: dc.

⊲

Negative coefficient of interaction with tenure: dc × ten.

■

More productive employees were selected for training.

■

Training program and experience became less complementary and/or statistical discrimination in selection for training was strengthened.

SLIDE 131

Schooling, cont

• 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 24

SLIDE 132

Schooling, cont

• 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 24

• Table 5: Selection for training programs.

SLIDE 133

Table 5 Probability of acceptance as a trainee for in-house training programs 5-1 5-2 5-3 5-4 Estimation method binary logit binary logit binary logit binary logit Dependent variable dcy sy dct dc Independent 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

***

SLIDE 134

Schooling, cont

• 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 24

• Table 5: Selection for training programs.

–

Height:

SLIDE 135

Schooling, cont

• 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 24

• Table 5: Selection for training programs.

–

Height:

⊲

By the middle 1940s (dcy, sy, dct):

SLIDE 136

Schooling, cont

• 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 24

• Table 5: Selection for training programs.

–

Height:

⊲

By the middle 1940s (dcy, sy, dct):

■

More likely accepted shorter employees.

SLIDE 137

Schooling, cont

• 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 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):

SLIDE 138

Schooling, cont

• 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 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.

SLIDE 139

Schooling, cont

• 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 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:

SLIDE 140

Schooling, cont

• 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 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):

SLIDE 141

Schooling, cont

• 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 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 previous experience.

SLIDE 142

Schooling, cont

• 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 25

SLIDE 143

Schooling, cont

• 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 25

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

SLIDE 144

Schooling, cont

• 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 25

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

–

From the late 1940s.

SLIDE 145

Schooling, cont

• 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 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.

SLIDE 146

Return on schooling

• 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 26

SLIDE 147

Return on schooling

• 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 26

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

SLIDE 148

Return on schooling

• 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 26

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

–

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

SLIDE 149

Return on schooling

• 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 26

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

–

interaction of 2-year cohort dummy and years of schooling (yj19XX × S), with controlling for employer learning effect (S × ten).

SLIDE 150

Table 6 Change in return on education. 6-1 6-2 6-3 Estimation method panel extended generalized least squares Dependent variable log(rw) log(rw) log(rw) Cross-section random effect random effect random effect Period (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 0.4656 yj1932-1933×log(S )

• 0.0119
• 0.5221

0.0369 1.4218 0.0165 0.7792 yj1934-1935×log(S ) 0.0004 0.0226 0.0510 2.3683

**

• 0.0183
• 1.0144

yj1936-1937×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 yes training program dummy × log yes yes yes dy×log(S ) No No Yes

SLIDE 151

Return on schooling

• 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 26

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

–

interaction of 2-year cohort dummy and years of schooling (yj19XX × S), with controlling for employer learning effect (S × ten).

⊲

Coefficients of yj19XX × S: Rapidly increasing from the 1950s in 6-2.

SLIDE 152

Return on schooling

• 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 26

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

–

interaction of 2-year cohort dummy and years of schooling (yj19XX × S), with controlling for employer learning effect (S × ten).

⊲

Coefficients of yj19XX × S: Rapidly increasing from the 1950s in 6-2.

–

Robustness check:

SLIDE 153

Return on schooling

• 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 26

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

–

interaction of 2-year cohort dummy and years of schooling (yj19XX × S), with controlling for employer learning effect (S × ten).

⊲

Coefficients of yj19XX × S: Rapidly increasing from the 1950s in 6-2.

–

Robustness check:

⊲

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

SLIDE 154

Return on schooling

• 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 26

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

–

interaction of 2-year cohort dummy and years of schooling (yj19XX × S), with controlling for employer learning effect (S × ten).

⊲

Coefficients of yj19XX × S: Rapidly increasing from the 1950s in 6-2.

–

Robustness check:

⊲

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

■

Return on schooling is rather decreasing.

SLIDE 155

Return on schooling

• 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 26

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

–

interaction of 2-year cohort dummy and years of schooling (yj19XX × S), with controlling for employer learning effect (S × ten).

⊲

Coefficients of yj19XX × S: Rapidly increasing from the 1950s in 6-2.

–

Robustness check:

⊲

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

■

Return on schooling is rather decreasing.

–

Return on schooling surged from the 1950s.

SLIDE 156

Return on career experiences

• 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 27

SLIDE 157

Return on career experiences

• 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 27

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

SLIDE 158

Table 7 Change in return on previous experience 7-1 7-2 Estimation method panel extended generalized least squares Dependent variable log(rw) log(rw) Cross-section random effect random effect Period (year) pooled (no control) pooled (no control) Independent variables coefficient t statistic coefficient t statistic 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 0.9917 yj1956-1957×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 yes training program dummy × log yes yes dy×log(S ) No Yes

SLIDE 159

Return on career experiences

• 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 27

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

–

Return appears to increase (7-1),

SLIDE 160

Return on career experiences

• 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 27

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

–

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

SLIDE 161

Return on career experiences

• 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 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),

SLIDE 162

Return on career experiences

• 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 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).

SLIDE 163

• 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

SLIDE 164

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

SLIDE 165

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:

SLIDE 166

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.

SLIDE 167

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 more previous experience than on firm tenure.

SLIDE 168

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 more previous experience than on firm tenure.

–

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

SLIDE 169

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 more previous experience than on firm tenure.

–

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

–

Selection for training programs came to be based on height (or schooling) as a signal of innate ability from the late 1940s.

SLIDE 170

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 more previous experience than on firm tenure.

–

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

–

Selection for training programs came to be based on height (or schooling) as a signal of innate ability from the late 1940s.

–

Return on schooling surged from the 1950s.

SLIDE 171

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 more previous experience than on firm tenure.

–

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

–

Selection for training programs came to be based on height (or schooling) as a signal of innate ability from the late 1940s.

–

Return on schooling surged from the 1950s.

–

Return on previous career experience fell from the 1950s.

SLIDE 172

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

SLIDE 173

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:

SLIDE 174

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 career experiences as an opportunity of general human capital investment from the 1950s,

SLIDE 175

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 career experiences as an opportunity of general human capital investment from the 1950s,

⊲

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

SLIDE 176

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 career experiences as an opportunity of general human capital investment from the 1950s,

⊲

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

–

The Japanese model was occasionally formed at the coincidence of the explosive expansion of demand for better educated workers and the prevalence of internal labor markets, catching up with the U.S. model.

SLIDE 177

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 career experiences as an opportunity of general human capital investment from the 1950s,

⊲

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

–

The Japanese model was occasionally formed at the coincidence of the explosive expansion of demand for better educated workers and the prevalence of internal labor markets, catching up with the U.S. model.

• Comparison with the German case.

SLIDE 178

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 career experiences as an opportunity of general human capital investment from the 1950s,

⊲

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

–

The Japanese model was occasionally formed at the coincidence of the explosive expansion of demand for better educated workers and the prevalence of internal labor markets, catching up with the U.S. model.

• Comparison with the German case.

–

Apprentice system seamlessly connected to compulsory schooling (Pischke and von Wachter 2008 REStat).