Sheepskin Effects in Japan

25 Pages Posted: 25 Nov 2002

See all articles by Thomas K. Bauer

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; IZA Institute of Labor Economics

Patrick J. Dross

DIW Berlin; Humboldt University, Berlin

John P. Haisken-DeNew

University of Melbourne - Melbourne Institute: Applied Economic & Social Research; McMaster University, Faculty of Social Sciences, Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: July 2003

Abstract

Using data for the 1990's, this paper examines the role of sheepskin effects in the returns to education for Japan. Our estimation results indicate that sheepskin effects explain about 50% of the total returns to schooling. We further find that sheepskin effect are only important for workers in small firms with the size of these effects being similar to comparable estimates for the US. Finally, the estimated sheepskin effects are decreasing with firm tenure, in particular for small firms. These results could be explained by the particular recruitment system of large firms in Japan, which makes university diploma as a screening device unimportant for large firms.

Keywords: Returns to Education, Sheepskin Effects, Japan

JEL Classification: J31, J24, I21

Suggested Citation

Bauer, Thomas K. and Dross, Patrick J. and Haisken-DeNew, John P., Sheepskin Effects in Japan (July 2003). IZA Discussion Paper No. 593, RWI Discussion Paper No. 5, Available at SSRN: https://ssrn.com/abstract=341501

Thomas K. Bauer (Contact Author)

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

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Patrick J. Dross

DIW Berlin ( email )

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Humboldt University, Berlin

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John P. Haisken-DeNew

University of Melbourne - Melbourne Institute: Applied Economic & Social Research

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Australia

McMaster University, Faculty of Social Sciences, Department of Economics ( email )

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