Abstract
Many theories about earnings inequality indicate that skills have a relationship with earnings. However, there are not many studies to clarify the relationship between skills and earnings, because it is difficult to measure skills. This study measures skills by “work discretion” and “complexity of work”, and then explores how skills-earnings relationship results in earnings inequality.
We got three findings by analyzing the survey data which were conducted in 2004 targeting adults in Japan. Firstly, we found that the skills related to high earnings are as follows; the skills required for decisions on the job and the skills required for manipulation of personal computers or machines. Secondly, we found that the earnings inequality by gender, education, part-time employment, firm size and tenure were explained partly by inequality of skills between these groups. Finally, the earnings of women, part-time employees, and workers in small firms are lower than men, full-time employees, and workers in big firms even if their jobs require the same level of skills.
