Why the earnings of the middle class declined: evidence from Japan

Using rich governmental micro data, we explore the reasons for the decline in earnings of the middle class in Japan. Many developed countries have seen the decrease in middle-class earnings, and Japan, long known for its solid middle class, is no exception. Our analyses revealed that the main reasons for the decline differ between males and females. The decrease in the earnings of middle-class male workers is due to the decrease in general human capital captured by returns to potential experience years. In contrast, the decrease in the earnings of middle-class female workers is mainly due to the increase in the supply of part-time workers. Furthermore, the firm-specific human capital captured by the return to tenure has increased only among high-wage male workers. This implies that Japanese firms invest in a selected few able workers, regardless of age, because they have been changing human resource strategy in response to economic globalization and changes in technology and the management environment.     

Lost in translation? The relative wages of immigrants in the Portuguese labour market

This article examines the wage gaps between immigrant and Portuguese workers using matched employer–employee data for the 2002–2008 period. We found that most of the wage gap is not due to the worst endowments of the immigrants but to differences in the returns to those characteristics and to the immigrant status effect. In particular, immigrants’ education and foreign experience are significantly less valued in the Portuguese labour market. Overall, the wages of immigrants do not fully converge to those of comparable natives as domestic experience increases. The assimilation rates tend to be stronger in the first years after migration and for immigrants with higher levels of foreign experience. Total immigrants are a heterogeneous group of different nationalities, with immigrants from the EU15 and China starring as the two extreme cases.     

Which Gender Wage Gap Estimates to Trust? A Comparative Analysis

The aim of this paper is to compare estimates of the adjusted wage gap from different methods and sets of conditioning variables. We apply available parametric and non‐parametric methods to LFS data from Poland for 2012. While the raw gap amounts to nearly 10 percent of the female wage; the adjusted wage gap estimates range between 15 percent and as much as 23 percent depending on the method and the choice of conditional variables. The differences across conditioning variables within the same method do not exceed 3pp, but including more variables almost universally results in larger estimates of the adjusted wage gaps. Methods that account for common support and selection into employment yielded higher estimates of the adjusted wage gap. While the actual point estimates of adjusted wage gap are slightly different, all of them are roughly twice as high as the raw gap, which corroborates the policy relevance of this methodological study.     

Wage Assimilation of Foreigners: Which Factors Close the Gap? Evidence From Germany

This study analyzes the development of the wages of male foreign workers from all important sending countries across time using longitudinal employment register data. A cohort analysis of the individuals entering the German labor market in the years 1999 to 2001 indicates that the raw wage gap of migrants compared to native Germans decreases by 14 log percentage points in the first eight years. The results of a decomposition method based on fixed effects regression models give evidence that this wage adjustment is mostly due to time‐varying observable characteristics. Selective return migration, and the trend effects play no role for the aggregate. We find that wage assimilation happens mainly through three channels: first, through the accumulation of firm‐specific human capital, which explains approximately 40 percent; second, search gains are approximately the same order of magnitude; and third, the accumulation of general human capital explains one‐fifth of the assimilation. We further demonstrate that the importance of these channels differs substantially by the origin groups.     

When does transition increase the gender wage gap?

In the context of underlying stability in female participation rates, the gender wagegap, measured by the log of monthly wages, more than doubled in Belarus from 1996 to 2006. In this respect, the country has experienced a variant of the transition which occurred in the former Soviet Union where relative female wages fell by more than female participation. We have used the Machado and Mata (2005) analysis of the gender gap distribution. This reveals that the effect of coefficients on observed characteristics in widening the gap was increasing over time, especially in the lower and middle deciles of the wage distribution. At the same time, the effect of the characteristics themselves in reducing the gap was shrinking. The decomposition of changes in the gap over time, based on Juhn et al. (1991) , confirms that the contraction of women’s relative wages has been caused both by a deterioration in the observed characteristics of female workers and by the associated remuneration. Changes in the residual wage distribution tend to slightly reduce the gap rather than, as is the case elsewhere, to increase it. The analysis carried out in line with Neuman and Oaxaca (2004) suggests that the increased gap was not caused by sample selection. Instead, two observed factors are found to be mainly responsible for the results: hours of work have increased for men more than for women and women have experienced segregation in low‐wage industries.     

Has Abe's Womanomics Worked?

The present paper estimates the effect of the Abe Cabinet's Womanomics policies that aimed to increase female labor supply and keep women on a career path. The policies are surveyed, and the effects are estimated using microdata from the Labor Force Survey combined with data at the prefectural level on day care provision. A difference‐in‐difference (DD) method is applied to uncover the impacts of the Abe Cabinet's policies. The rapid increase in the provision of infant care, especially in the urban area, has contributed to a strong increase in the labor participation of mothers with young children. In addition, DD method estimates show a strong increase in mothers with infants staying in permanent‐contract regular employment. A significant shortening of work hours of workers, especially of parents with infants, is observed, which enabled working mothers to maintain their employment status. A change in the gender wage gap in the Japanese labor market is observed, but much progress is still required to close the large wage gap.