Advertisement

Foreign Ownership, Human Capital and Earnings in the Japanese Labour Market

  • Hiroshi Ono
Part of the Palgrave Macmillan Asian Business Series book series (PAMABS)

Abstract

The main purpose of this chapter is to investigate the differences in the distribution of human capital and the structure of earnings between workers in domestic firms and foreign-owned firms in Japan. The main question of interest is: Do foreign firms pay more than local firms in Japan? If so, why? Empirical studies in this area remain surprisingly few, and research opportunities remain vast. Our research focus on Japan is of considerable value in light of the so-called unique features of the Japanese labour market such as seniority, lifetime employment, and high degrees of gender segregation. We perform detailed econometric analysis using individual-level data in order to estimate the earnings premium associated with employment in foreign-owned firms. We also examine similarities and differences in the determinants of earnings between workers in domestic and foreign firms. The current research will advance our understanding of the operations of foreign multinationals in Japan, and add further empirical support to an area more deserving of evidence.

Keywords

Human Capital Foreign Direct Investment Foreign Firm Gini Coefficient Industry Sector 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Akerlof, G.A. (1982) ‘Labour Contracts as Partial Gift Exchange’, Quarterly Journal of Economics, 97: 543–69.CrossRefGoogle Scholar
  2. Auer, P. and Cazes, S. (2000) ‘The Resilience of Long-term Employment Relationships: Evidence from the Industrialised Countries’, International Labour Review, 139: 379–408.CrossRefGoogle Scholar
  3. Becker, G.S. (1993) Human Capital (Chicago: University of Chicago Press).CrossRefGoogle Scholar
  4. Blomström, M., Konan, D. and Lipsey, R.E. (2001) ‘FDI in the Restructuring of the Japanese Economy’, in M. Blomström, B. Gangnes and S. LaCroix (eds), Japan’s New Economy: Continuity and Change in the Twenty-First Century (Oxford: Oxford University Press): 245–62.Google Scholar
  5. Blomström, M. and Kokko, A. (2003) ‘Human Capital and Inward FDI’, EIJS Working Paper no. 167.Google Scholar
  6. Bronfenbrenner, M. and Yasuba, Y. (1987) ‘Economic Welfare’, in K. Yamamura and Y. Yasuba (eds), The Political Economy of Japan, Volume 1: The Domestic Transformation (Stanford: Stanford University Press): 93–136.Google Scholar
  7. Feliciano, Z. and Lipsey, R.E. (1999) ‘Foreign Ownership and Wages in the United States, 1987–1992’, NBER Working Paper no. 6923.CrossRefGoogle Scholar
  8. Girma, S., Greenaway, D. and Wakelin, K. (1999) ‘Wages, Productivity and Foreign Ownership in UK Manufacturing’, Center for Research on Globalisation and Labour Markets, Research Paper no. 99/14.Google Scholar
  9. Görg, H., Strobl, E. and Walsh, F. (2002) ‘Why Do Foreign-Owned Firms Pay More? The Role of On-the-job Training’, IZA Discussion Paper no. 590.Google Scholar
  10. Hashimoto, M. and Raisian, J. (1985) ‘Employment Tenure and Earnings Profiles in Japan and the United States’, American Economic Review, 75: 721–35.Google Scholar
  11. Hashimoto, M. (1989) ‘Investments in Employer-Employee Attachments by Japanese and US Workers in Firms of Varying Size’, Journal of the Japanese and International Economies, 3: 31–48.CrossRefGoogle Scholar
  12. Heyman, F., Sjöholm, F. and Gustavsson Tingvall, P. (20049 ‘Is There Really a Foreign Ownership Wage Premium? Evidence from Matched Employer-Employee Data’, Stockholm School of Economics, EIJS working paper no. 206.Google Scholar
  13. Howenstine, N.G. and Zeile, W.J. (1994) ‘Characteristics of Foreign-Owned US Manufacturing Establishments’, Survey of Current Business, 74: 34–59.Google Scholar
  14. International Labour Organization (2000) Year Book of Labour Statistics (Geneva: International Labour Office).Google Scholar
  15. Japan External Trade Organization (JETRO) (2002) Gaishikei kigyou koyou chousa — Kekka gaiyo (Summary from the Employment Survey of Foreign-owned Firms) (Tokyo: JETRO).Google Scholar
  16. Kalleberg, A.L. and Lincoln, J.R. (1988) ‘The Structure of Earnings Inequality in the United States and Japan’, American Journal of Sociology, 94: 121–53.CrossRefGoogle Scholar
  17. Kato, T. and Rockel, M. (1992) ‘Experiences, Credentials, and Compensation in the Japanese and US Managerial Labour Markets: Evidence from New Micro Data’, Journal of the Japanese and International Economies, 6: 30–51.CrossRefGoogle Scholar
  18. Kawashima, Y. and Tachibanaki, T. (1986) ‘The Effect of Discrimination and of Industry Segmentation on Japanese Wage Differentials in Relation to Education’, International Journal of Industrial Organization, 4: 43–68.CrossRefGoogle Scholar
  19. Lincoln, J.R. and Kalleberg, A.L. (1985) ‘Work Organization and Workforce Commitment: A Study of Plants and Employees in the US and Japan’, American Sociological Review, 50: 738–60.CrossRefGoogle Scholar
  20. Lincoln, J.R. and McBride, K. (1987) ‘Japanese Industrial Organization in Comparative Perspective’, Annual Review of Sociology, 13: 289–312.CrossRefGoogle Scholar
  21. Lipsey, R.E. (1994) ‘Foreign-owned Firms and US Wages’, NBER Working Paper no. 4927.CrossRefGoogle Scholar
  22. Lipsey, R.E. (2001) ‘Foreign Direct Investment and the Operations of Multinational Firms’, NBER Reporter, Winter 2000/2001.Google Scholar
  23. Lipsey, R.E. (2002) ‘Home and Host Country Effects of FDI’, NBER Working Paper no. 9293.CrossRefGoogle Scholar
  24. Lipsey, R.E. and Sjöholm, F. (2001) ‘Foreign Direct Investment and Wages in Indonesian Manufacturing’, NBER Working Paper no. 8299.CrossRefGoogle Scholar
  25. Lipsey, R.E. and Sjöholm, F. (2003) ‘Foreign Firms and Indonesian Manufacturing Wages: An Analysis with Panel Data’, NBER Working Paper no. 9417.CrossRefGoogle Scholar
  26. Lipsey, R.E. and Sjöholm, F. (2004) ‘Foreign Direct Investment, Education, and Wages in Indonesian Manufacturing’, Journal of Development Economics, 73: 415–22.CrossRefGoogle Scholar
  27. MacDuffie, J.P. and Kochan, T.A. (1995) ‘Do US Firms Invest Less in Human Resources? Training in the World Auto Industry’, Industrial Relations, 34: 147–68.Google Scholar
  28. Mincer, J. (1971) Schooling, Experience, and Earnings (New York: Columbia University Press).Google Scholar
  29. Mincer, J. and Higuchi, Y. (1987) ‘Wage Structures and Labour Turnover in the US and in Japan’, NBER Working Paper no. 2306.CrossRefGoogle Scholar
  30. Organisation for Economic Co-operation and Development (OECD) (1999) OECD Benchmark Definition of Foreign Direct Investment — Third Edition (Paris: OECD).Google Scholar
  31. Organisation for Economic Co-operation and Development (OECD) (2002) Education at a Glance: OECD Indicators 2002 (Paris: OECD).Google Scholar
  32. Ohta, K. (2000) ‘Kokusai hikaku kara mita Nihon no shotoku kakusa’ (Income distribution in Japan from an international perspective), Japanese Journal of Labour Studies, 42: 33–40.Google Scholar
  33. Ono, H.(2004) ‘Are Sons and Daughters Substitutable? Allocation of Family Resources in Contemporary Japan’, Journal of the Japanese and International Economies, 18:143–60.CrossRefGoogle Scholar
  34. Ono, H. and Piper, N. (2004) ‘Japanese Women Studying Abroad: The Case of the United States’, Women’s Studies International Forum, 27: 101–18.CrossRefGoogle Scholar
  35. Pyatt, G., Chen, C. and Fei, J. (1980) ‘The Distribution of Income by Factor Components’, Quarterly Journal of Economics, 95: 451–73.CrossRefGoogle Scholar
  36. Rebick, M.E. (1993) ‘The Persistence of Firm-Size Differentials and Labour Market Segmentation in Japan’, Journal of the Japanese and International Economies, 7: 132–56.CrossRefGoogle Scholar
  37. Recruit Works Institute (2001) Working Persons Chosa 2000 — Shutoken (Working Persons Survey 2000 — Greater Tokyo Metropolitan Area) (Tokyo: Recruit Works Institute).Google Scholar
  38. Tachibanaki, T. (1984) ‘Labour Mobility and Job Tenure’, in M. Aoki (ed.), The Economic Analysis of the Japanese Firm (Amsterdam: Elsevier Science Publishers): 77–102.Google Scholar
  39. Tachibanaki, T. and Ohta, S. (1994) ‘Wage Differentials by Industy and the Size of Firm, and Labour Market in Japan’, in T. Tachibanaki (ed.), Labour Market and Economic Performance: Europe, Japan and the USA (New York: St Martin’s Press): 56–92.Google Scholar
  40. Ushiogi, M. (1986) ‘Transition from High School to Work: The Japanese Case’, in W.K. Cummings, E.R. Beauchamp, S. Ichikawa, V.N. Kobayashi and M. Ushiogi (eds), Educational Policies in Crisis: Japanese and American Perspectives (New York: Praeger): 197–209.Google Scholar
  41. Urata, S. (1996) ‘Tai-nichi chokusetu toushi no genjo to sogai youin’ (Barriers to Foreign Direct Investment in Japan), Nihon Keizai Kenkyu, no. 31: 66–82.Google Scholar

Copyright information

© Hiroshi Ono 2006

Authors and Affiliations

  • Hiroshi Ono

There are no affiliations available

Personalised recommendations