Winning the race against technology

Daiji Kawaguchi and Yuko Mori
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Yuko Mori: Japan Society for Promotion of Science and Hitotsubashi University

No 14-E-5, Bank of Japan Working Paper Series from Bank of Japan

Abstract: This study examines the importance of the supply factor as a determinant of the college wage premium by comparing the trends of the college wage premium between Japan and the US. The wage differential between college and high-school graduates decreased from 0.35 to 0.34 log points in Japan between 1986 and 2008, while during the same period, it increased from 0.43 to 0.65 log points in the US. This paper demonstrates that the more rapid increase in the number of college graduates in Japan than in the US explains about one-third of these contrasting trends. A simulation indicates that if the supply in the US had followed that in Japan, the return to college would have increased by 0.15 point instead of the actual 0.23 point. The difference in post-war fertility trends largely explains the difference in the supply increase of college graduates between the two countries.

Date: 2014-03-13
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Citations: View citations in EconPapers (7)

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Working Paper: Winning the Race against Technology (2014)
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