Decreasing wage returns to human capital: Analysis of wage and job experience using micro data of workers☆

Recent literature reports a decrease in wage returns to skills since the 2000s. This paper contributes additional evidence that this trend is also occurring with skills that accumulate through job experience. We use micro data of Japanese workers to analyze this phenomenon by taking advantage of unique Japanese employment practices that emphasize skills acquired through tenure and on-the-job training as important human capital. We find that (1) wage returns to job experience have significantly decreased from the 2000s to the 2010s and (2) decomposing the human capital into general and firm-specific, the returns to the latter have decreased significantly.