After WWI, the Japanese economy experienced a structural change characterized by the
emergence of large firms and increased numbers of white-collar workers. This paper
explores how the human capital of white-collar workers was formed, using micro
personnel data from Mitsubishi zaibatsu (business group). Applying the Mincer equation,
we investigated the difference in wage structures for clerks and engineers. That is, while
returns on formal education and work experience outside the firm and tenure in the firm
were equivalent for engineers, for clerks, return on tenure was significantly higher than
returns on formal education and work experience outside the firm.
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