Abstract
In this paper, we analyze changes in wage premiums that workers with graduate degrees receive in Japan's labor market. Our study employs a cohort data set from two questionnaire surveys conducted in September 1998 and December 2009. Japanese graduate schools have experienced major reforms since the late 1980s. Consequently, the number of students pursuing graduate degrees has increased considerably. However, few studies have examined the relevance of graduate education in careers, and little empirical research has exclusively focused on this issue. After workers receive education and training, the effects are presumably appraised in light of occupational attainment. A statistical analysis was conducted to examine the effect of graduate education. The results indicate that the wage premiums of such workers exhibit a downward trend. Moreover, they reveal that a graduate degree does not provide workers with a steady advantage in wage determination, especially among workers who graduate in the liberal arts and social sciences. This implies that the occupational structure of the labor market does not have the capacity to absorb the rising number of educated workers into traditional occupations.
