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The Postgraduate Wage Premium: Estimating the Age-Wage Profiles Using 2007 Employment Status Survey(in Japanese)

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  • KAKIZAWA Hisanobu
  • HIRAO Tomotaka
  • MATSUSHIGE Hisakazu
  • YAMASAKI Izumi
  • INUI Tomohiko

Abstract

Many people have been skeptical about the economic value of going to graduate school in Japan. However, there are few empirical studies to analyze this issue. This paper estimates the private internal rate of return to postgraduate education and assesses the postgraduate wage premium in Japan. In particular, the study illustrates how much the payroll systems of companies and institutions favor postgraduate graduates over college graduates by analyzing the age-wage profiles of workers who continuously work for the same employers after they graduate. The comparison of the age-wage profiles of college degree holders and postgraduate degree holders reveals that the lifetime wage income is higher among those with postgraduate degrees than among those who have college degrees both for males and females. The wages of postgraduate graduates continue to rise as they get older, which widens the wage gap with college graduates. The internal rates of return to master’s degrees are 11.4% for males and 10.1% for females, while the ones to Ph.Ds are 5.9% for males and 5.7% for females. The paper therefore shows the significant postgraduate wage premium over college graduates.

Suggested Citation

  • KAKIZAWA Hisanobu & HIRAO Tomotaka & MATSUSHIGE Hisakazu & YAMASAKI Izumi & INUI Tomohiko, 2014. "The Postgraduate Wage Premium: Estimating the Age-Wage Profiles Using 2007 Employment Status Survey(in Japanese)," ESRI Discussion paper series 310, Economic and Social Research Institute (ESRI).
    • Handle: RePEc:esj:esridp:310
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