Wage Differentials b/w College and HS Graduates b/w the US and Japan

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Feb 21, 2011 12:12 economics Japan
Wage differentials between college graduates and high school graduates are increasing in the US after the 1980’s and now. On other side, they don’t almost change in Japan at the time. I think that many people want to conclude that this is a powerful signs of Japan’s lost two decades. Because this fact seems to suggest that highly trained workers like IT and (or?) bio industries have snatched jobs of unskilled labor. But facts suggest a different conclusion.

According to labor economy, based on huge statistics, the reason is that university entrance rates have hit the peak in the US, but not in Japan. That is, college graduates have become relatively rare in the US and therefore their wages are increasing. The simple and well-known rule that what is rare is expensive has determined the difference between the US and Japan. Wage differentials between college graduates and high school graduates depend on which is faster, progress of technology or progress of the spread of high education in a society.

References:
Studies by Kawaguchi Daiji (Hitotsubashi), Claudia Goldin (Harvard) and Lawrence Katz (Harvard).