Silviase/jgov_v1.4_full_ann huggingface dataset:
society or abroad) may matter more than the overall level of education (general human capital) in predicting immigrant earnings in Japan.

Models I-c and I-d also test the effects of Japanese and English writing skills on wages. Both positive and significant, the results are consistent with previous studies (e.g., Portes and Rumbaut 2006; Alba and Nee 2003). As shown by its strong positive coefficient, English proficiency, as a type of capital brought from abroad, is highly valued in the Japanese labor market. Japanese proficiency, a crucial host society-specific human capital, is also confirmed vital to economic success. Yet, what is surprising is that Japanese proficiency is not correlated with YSM. Thus, the Japanese skills valued here are not a product of experience accumulated in Japan; rather, they reflect skills acquired abroad. In other words, they are a part of human capital directly brought from abroad. Foreign capital, or skills brought from abroad, once again, proves to be a crucial determinant of immigrants' economic mobility in Japan.

These results are counterintuitive. Despite the prevalence of the positive assimilation thesis, it does not seem to hold in Japan. Even though the coefficient of YSM ceases to be statistically significant after controlling for the location of the highest degree earned (Models I-c and I-d), there is still no evidence of positive assimilation.

## Estimating Earning Changes Over Time (Model I-e and Model I-f)

The results presented above simply show a negative correlation between immigrant wages and YSM, as our data are not designed to track down changes of the same individuals at different points in time. Yet, we can estimate changes in immigrant wages over time by adding another variable to our models: the initial wages immigrants
earned upon arriving in Japan. Models I-e and I-f estimate the determinants of current wages, controlling for the effect of initial wages earned in Japan. The results (Table 2) show that adding initial wages as another independent variable (Models I-e and I-f) does not change the effects of the factors analyzed earlier (Models I-c and I-d). This indeed suggests that time spent in Japan has no significant effect on current wages, holding constant initial wages earned upon migrating to the country. In other words, the accumulation of host-specific human capital, measured by duration in time in the host society, does not increase immigrants' wages over time in Japan.

## Mechanisms of Negative and Non-Positive Assimilation

Taken together, time spent in Japan has either a negative or insignificant effect on earnings. Moreover, human capital accumulated in the host society, measured as education attained in Japan, has a robust negative effect on immigrant wages. Why does host-specific human capital matter less than foreign capital brought from abroad? This may, in part, be explained by what immigrants actually do with their skills in Japan.

Figure 1 shows that there is a substantial difference in occupational status between immigrants with foreign and Japanese educational credentials. Those who earned their highest degrees abroad are more likely to engage in professional, technical, or managerial jobs (71.7%) than others with Japanese educational credentials (51.4%). A majority of foreign educated immigrants in our survey engaged in teaching, language editing, trade, and IT—the types of jobs that are likely to complement skills possessed by natives—in Japan. On the other hand, immigrants educated in Japan tended to take up jobs that would face more competition with natives, such as clerical jobs, sales, or
general managerial work in companies. According to a survey conducted by JASSO (2005) among foreign graduates from Japanese universities, a majority of those who stayed in Japan were company employees engaged in translation/interpretation business (28%), technical development (11%), or operations and sales (11%)—in short, they mostly engaged in general office work, like natives, within a Japanese company setting. Foreign credentials, thus, were likely to lead to more highly remunerated professional jobs, because they were often channeled into a different sector of the labor market (specific types of jobs) where such skills are regarded a premium not possessed by natives.

The reason foreign capital matters may also have to do with a number of unobserved factors not captured by our models. In particular, the effects of foreign (vs. host) education may be mediated by characteristics, such as innate ability, aspirations, and parental emphasis on education. Since our analysis based on OLS estimates with cross-sectional data cannot prove causality, we do not know if foreign education causes wages or if high wage earners were simply educated abroad. High wage earners with a foreign education may have a higher ability in the first place, or migrants who opt to acquire a Japanese education may be less ambitious, reflecting the widespread reputation that it is relatively easy for foreign students to get into Japanese universities.

To see who earned the highest degree in Japan or elsewhere, we ran a simple correlation between the place of the highest degree and a select number of family and individual observable characteristics, such as father’s education, gender, and age (Table 4). Since the correlations are weak or insignificant on the most part, the place of the
degree seems more or less randomly distributed. The degree earned in Japan or abroad, therefore, has its own effect on wages earned in Japan.

A better clue as to why foreign education matters may lie in what is actually valued in the Japanese labor market. Namely, the kind of foreign capital valued may have a specific regional or cultural component. As discussed earlier, Chiswick and Miller (2011) stipulate that negative assimilation occurs under two conditions: immigrants come from countries with comparable levels of economic development (e.g., from the U.K. to the U.S.), and immigrants possess perfectly transferable skills (e.g., native English fluency). In line with this, negative assimilation observed in Japan may be more applicable to highly skilled immigrants from high-income countries. Stated differently, the type of foreign skills valued in the Japanese labor market may be regionally or culturally specific. To test this, we next ran separate regressions for Asia (China and Korea) and the English-speaking “West” (the U.S., the U.K., Canada, Australia, and New Zealand) $ ^{15} $ .

## Separate Models by Region and Country (Models II)

The results summarized in Table 3 show some regional differences. Negative assimilation is strongly at work for Westerners, but only for Westerners $ ^{16} $ . The negative and significant coefficient of YSM for Westerners suggests that their wages do decline over time in Japan. However, this is not the case for Asians. Moreover, the positive and
significant coefficient of quadratic YSM in the Western model implies that their wage and YSM have a U-shape relationship; their earnings decline for the first ten years, then gradually rise with the duration of time in Japan. Asians exhibit a somewhat different pattern. While YSM has a negative effect, which is significant only at the 0.1 level (Model II-a), its effect disappears once location-specific human capital (degree obtained in Japan and English language skills) is included in the model (Model II-b). While positive assimilation is clearly not observed here, we cannot conclude that negative assimilation works for Asian migrants.

For both groups, education attained in Japan has a negative effect, while English skills have a positive effect, on wages. Thus, a premium attached to foreign capital remains strong regardless of where migrants come from. This may be due to the relatively short supply of personnel sufficiently proficient in English or other foreign skills in Japan, as reflected in the small number of Japanese who study abroad or earn a degree abroad (See Institute of International Education 2012; JASSO 2012). It may also reflect the Japanese immigration policy that accords premiums to foreign skills brought from abroad.

Moreover, the separate regression analysis shows that a different mechanism is at work in explaining the economic mobility of each group. In general, the mobility pattern of Asians more closely resembles the mainstream pattern in Japan, as they gain economically by working at a larger (thus more prestigious) firm for longer hours like natives. A significant exception, and the only difference, is the strong positive effect of foreign capital, such as English skills and foreign education. As mentioned earlier, Asian migrants, particularly those educated in Japan, may follow (or are expected to follow) the
economic mobility path typically experienced by natives--obtaining employment in larger prestigious firms by going through specific labor recruitment practices learned in local educational institutions. While they largely reap economic rewards by following the path, the foreign capital they possess still has a labor market premium. And this is robust and consistent, regardless of how long they stay in Japan.

The economic mobility of Western migrants, by contrast, exhibits a clearer pattern of negative assimilation. While those educated in Japan do follow a pattern similar to Asians and natives, what helps them move up, overall, is human capital nourished abroad. The different results observed between the two regional patterns may imply that foreign capital brought from the West, such as English skills, are particularly valued in the Japanese labor market. Alternatively, Westerners, who are less likely than Asians to possess Japan-specific human capital, such as Japanese language proficiency and education, may be more predisposed to utilize their foreign capital in the Japanese labor market.

Altogether, negative assimilation appears to be more broadly applicable in Japan than suggested by Chiswick and Miller (2011); at least, the positive assimilation thesis commonly used to explain immigrant economic mobility does not apply to the case of Japan. While foreign skills directly brought from abroad contribute to higher wages, human capital accumulated in the host society puts immigrants at a relative disadvantage.

### V. Discussion and Conclusions

Although positive assimilation has been a dominant model in explaining immigrants' economic mobility, we find that it is not the case in Japan. Contrary to the
conventional view, locally acquired human capital does not, ironically, contribute as much to wages as skills brought from abroad, even though the government tries to lure and cultivate foreign talent via local education.

In the context of growing global talent competition, educationally channeled migration is increasingly seen and identified as an important national strategy (Terakawa 2009). It is a strategy to smoothly integrate immigrants into Japanese society by instilling locally-specific skills and culture through education. Sometimes called “building a Japanese-style immigrant nation” (Sakanaka 2011; LDP 2008), such a view envisions a “multicultural” nation where Japanese nationals and foreigners harmoniously co-exist and are respected, treated, and rewarded equally for their skills and potentials (Ministry of Internal Affairs and Communications 2006).

Given our findings, however, this strategy may end up producing immigrants who are unable to gain economic rewards commensurate with their skill levels. Without economic rewards, the value of Japanese education may diminish, particularly for the highly skilled who can expect higher economic rewards elsewhere. The most talented and able with globally transferable skills may simply opt to move elsewhere, using Japan as a stepping-stone or altogether bypassing the country.

The strategy to incorporate immigrants via education may also result in reinforcing social differentiations. While education is a tool to integrate a nation (Anderson 2004) and decrease social inequalities (Oshio and Senoh 2003), it also plays a role in creating social stratification. Arbeit and Warren (2012) point out that education serves as a mechanism to create a hierarchy by attaching different values to different degrees, depending on where they were earned—U.S. degrees are worth the most, while
the least valuable are degrees from poorer, non-European countries. The kind of education (or the type of school attended) as well as the level of education acquired is significantly determined by parental (or father’s) education, and they, in turn, shape one’s life chances (Oshio and Senoh 2003; Tachibanaki 1988).

The way growing numbers of immigrants integrate to Japanese society may also contribute to such divisions. As we have seen, the skills immigrants bring are sorted, valued, and incorporated into different segments of the Japanese labor market, depending on where they were educated, where they come from, and how long they have resided in Japan. Foreign skills, though highly rewarded in the Japanese labor market, especially at the beginning, are often channeled into specific types of jobs “reserved” for foreigners. And migrants do not seem to gain more economically by staying longer in Japan. By contrast, locally bred skills, though modestly rewarded, are typically sorted into the mainstream career path where they compete more directly with natives.

The immigrants’ economic mobility pattern we have presented here also reveals the sorting mechanism of immigration, not only of who comes to Japan in the first place, but also of who stays and who moves on from Japan. This geographical mobility pattern, reflected in economic mobility experienced or expected in Japan, may further reinforce the social differentiation and hierarchy. In short, while the growing volume of immigration to Japan tends to be discussed, and debated, within the framework of fostering national integration and multicultural ties, it also plays a role in creating and reinforcing divisions between Japanese and foreigners.

Yet, it is this differentiation that helps immigrants achieve economic mobility in Japan. Although “success” is often defined in Japan as climbing up the mainstream
career path by acquiring a national education and going through the standard company recruitment process, immigrants often “make it” by acquiring, bringing, and utilizing skills foreign to natives. Thus, assimilating, or acquiring locally specific human capital, does not always lead to upward economic mobility, and it certainly appears to be the case for immigrants, in general, in Japan.
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