The Labor-market Valuation of “SK skill” and “SS skill” in Occupations, and Their Relationship with the Gender Wage Gap and an Underutilization of the Skills among Irregular Employees

By using the data from the 2000-2018 Japanese General Social Surveys linked with U.S. occupational skill data provided by O*NET Online of the US Ministry of Labor , this paper clarifies, with Analysis 1, the determinants of the attainment of occupations with (1) high SK (science and technology) skill, (2) high SS (social service) skill, and for comparison, (3) managerial/administrative positions. In particular, differences in the determinants of (1) and (3) demonstrate that effective policies to promote women’s empowerment in labor markets will be quite different between the promotion of women in the STEM-related occupations and the promotion of women in managerial/administrative positions.

With Analysis 2, this paper clarifies the effects of the two kinds of occupational skills on wage and, in particular, how these effects are related to gender wage gap and the underutilization of occupational skills among irregular employees. The decomposition of the gender gap in the attainment of high SK-skill occupations provides policy guidance for the promotion of women in STEM-related occupations.

This paper also clarifies how irregular employment and its expansion over time worked against the force of increasing higher education levels during the years 2000-2018, which could have otherwise generated greater increases in the proportion of people who attain occupations with higher skills and consequently higher wages despite being based on indirect evidence.

Theoretically, although quantitative analyses of the effects of human capital on wage, represented by Jacob Mincer and his colleagues, have mostly ignored the role that occupational attainment plays as an intervening variable, this paper suggests that the introduction of occupational skills as intervening variables may introduce a new method of assessing the role that matching between occupation and human resources plays in determining wages. This paper also urges the construction of occupational-skill measures based on Japanese data, especially for the future evaluation of the government’s reskilling policies.