Stable Wage Distribution in Japan, 1982-2002: A Counter Example for SBTC?

Author Name KAWAGUCHI Daiji (Faculty Fellow, RIETI) / MORI Yuko (Hitotsubashi University)
Creation Date/NO. July 2008 08-E-020
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Wage distribution has been nearly stable in Japan for the last two decades, contrary to findings in the US, Canada, and the UK. The change in wage distribution during this period was almost completely caused by a distributional change in worker attributes. This implies that skill prices were very stable between 1982 and 2002. Both demand and supply for skilled workers have increased because of skill-biased technological change (SBTC), a rise in the number of college-educated workers induced by educational policy changes, and the aging of the population. In the balance of shifts in demand and supply, the skill price has been stable. Industries that experienced rapid computerization also experienced workers' skill upgrading. We find evidence consistent with SBTC.