Objective Effects and Subjective Assessments of Employing Specified Skilled Workers

This paper examines the characteristics of firms employing foreign workers, particularly Specified Skilled Workers (SSWs), and changes following their employment. SSWs and Technical Intern Trainees (TITs) tend to be employed by firms with relatively higher labor shares, lower labor productivity, and lower wages for Japanese employees. Event-study estimates show a decline in wages per worker, but no significant changes in sales, labor shares, or labor productivity relative to non-employing firms. These findings suggest sorting of foreign workers into low-wage, labor-intensive firms rather than within-firm segregation from Japanese workers. Subjective assessments show that establishments retaining former TITs as SSWs emphasized human resource development and reported higher satisfaction. Those recruiting job changers or skills-test passers valued their role in easing labor shortages but provided less support and smaller wage increases and reported lower satisfaction with worker quality. The findings suggest that the SSW system should account for differences in support and human resource development across recruitment pathways and effects on coworkers.