Silviase/jgov_v1.4_full_ann huggingface dataset:
Drawing on data collected on the major immigrant groups in Japan (Chinese, Koreans, and English-speaking migrants from North America, Western Europe, and Oceania), we demonstrate below how “negative assimilation” works, as immigrants increasingly become integrated into Japanese society. Ironically, locally nourished human capital is not always valued in the labor market despite the government’s efforts to lure and cultivate foreign talent via local education. This finding, as described in the subsequent sections, helps us understand not only how immigrants “make it” in Japan, but also how immigrants and their skills are sorted, valued, and differentially incorporated into the Japanese labor market. It also tells us an important story about how the growing volume of immigration and immigrant integration shape Japanese nationhood at the time the country is steadily, albeit slowly, embracing its own version of “multiculturalism” (Ministry of Internal Affairs and Communications 2006; Komai 2006). Before proceeding to the results of our analysis, we first present a general view of how immigrants “make it” and how education plays a role, whether it was obtained in the host society or immigrants’ countries of origin.

### I I. How Immigrants “Make it” in the Host Society—the Role of Education

## Positive Assimilation

Immigrants’ economic mobility has predominantly been explained by assimilation or what Chiswick and Miller (2011) call “positive assimilation.” On average, immigrants earn less than their native-born counterparts, because they often lack directly transferable skills (Borjas, 2006; Portes and Rumbaut, 2006; Arbeit and Warren 2012; Kanas et al. 2011; Ferrer and Riddel 2002; Haskins 2008). Moreover, since immigrants tend to
originate in poorer countries, the type of skills they bring from home may not be readily applicable to richer countries. With increased duration in the destination, their economic status generally improves, as they assimilate and acquire skills specific to the host society (Chiswick 1978, 1979; Akresh 2006; Waldinger and Perlmann 1998; Alba and Nee 2003; Portes and Rumbaut 2006). This “positive assimilation” model, consistent with classic assimilation theory, is so robust, according to Chiswick and Miller (2011), that it has been found for all the major immigrant receiving countries and time periods, tested with various sources of data.

Central to this model is the accumulation of host-country experience. Human capital always has a country-specific component, such as knowledge of local institutions and culture and customs (Ferrer and Riddel 2002; Chiswick and Miller 2011; Portes and Fernandez-Kelly 2009; Kochhar 2005; Connor and Massey 2010). Thus, greater experience, or merely more time spent, in the host society usually translates into higher earnings. Accordingly, education acquired in the host society is regarded as a key determinant of immigrants' economic achievement.

### The Role of Host vs. Foreign Education

As demonstrated in numerous studies, host society education helps immigrants learn the host language and culture and acquire skills relevant for the local labor market. In their study on immigrants in Germany, Kanas et al. (2011) found that those who obtained their education in the host country had higher occupational status and annual income than those who did not acquire German education. Likewise, Akresh (2006) empirically showed that having some U.S. education improves the occupational status of
U.S. immigrants. According to Lianos et al. (2004), EU graduates tend to fare better than other degree holders in the Greek labor market.

By the same token, foreign degrees, in general, are worth less than local degrees (Arbeit and Warren 2012; Fong and Cao 2009). Zheng and Xie (2004) specifically showed that U.S. immigrants with foreign degrees earned 14% less per year than U.S. degree holders. Li (2001) also found that foreign-educated immigrants in Canada earned about $10,000 less than Canadian-educated immigrants annually. This “discount effect” (Fong and Cao 2009), or penalty associated with foreign education, may be attributed to employers’ preference or inability to evaluate foreign degrees properly (Arbeit and Warren 2012); in the eyes of employers, foreign education may impart fewer skills deemed useful. In short, foreign credentials may simply be non-transferable or non-applicable; or else, they may be devalued to protect native workers by minimizing competition from newcomers (Fong and Cao 2009; DaVanzo and Morrison 1981).

However, the “discount effect” of foreign education is not uniform across the board. Fong and Cao (2009) found that the effect is smaller among professionals who are able to offset it with more extensive social networks they tend to possess. Arbeit and Warren (2012) similarly show that the penalty tends to be greater among less educated individuals. The value of foreign education also varies, depending on where it was obtained. According to Akresh (2007), educational credentials earned in Canada and Western Europe are valued more in the U.S. than those earned in Asia or Latin America (See also Arbeit and Warren 2012; Bratsberg and Ragan 2002). Similarly, Arbeit and Warren (2012) demonstrate that Canadian or U.K. degree holders in the U.S. are more likely than their Latin American or Caribbean counterparts to engage in jobs in the fields.
in which the degrees were earned. Thus, the value of foreign education may vary according to its transferability, reflected in the cultural or linguistic distance between the host and home countries (Chiswick and Miller 2011). In sum, the “positive assimilation” model postulates that acquiring the cultural norms of the host society helps immigrants move up the economic ladder. Therefore, a crucial component is experience accumulated, and particularly human capital or education obtained, in the country of destination.

## Negative Assimilation

Whereas “positive assimilation” remains a dominant model in explaining immigrants’ economic mobility, “negative assimilation” (Chiswick and Miller 2011) posits that some immigrants, who come in with readily transferable skills, do not necessarily follow the traditional path of upward economic mobility. According to the authors, the model is applicable only to immigrants from developed countries similar in culture, language, and labor market practices to the host society. In this model, earnings decrease with duration in the host society, because the economic rent that motivated the initial migration declines over time (Chiswick and Miller 2011).

There are a number of possible reasons for the decline in economic rent. First, those immigrants who experience negative assimilation are likely to be a selected group of individuals in the first place who were drawn to the destination because of high earnings or higher returns to their skills than expected elsewhere. A relatively high wage that prompted their initial migration, however, does not always last indefinitely (See Chiwsick and Miller 2011, P. 504). Moreover, the decline may simply reflect a selection bias in who leaves and remains in the country; those migrants who come in with globally
transferable skills may not stay long in the destination, especially as they see the economic rent decline over time. The owners of globally transferable skills tend to be more mobile and move wherever the returns are highest. This mobility pattern may result in the gradual decrease of wages on average by leaving behind those who are less able to expect higher wages elsewhere $ ^{6} $ . The selection bias may also reflect the rising costs of return migration over time. As immigrants stay longer in the host society, they are likely to form families or establish new personal contacts, making it more difficult to move back or onward. Relative to the rising costs of return, decreasing wages may become more acceptable to immigrants over time.

In short, negative assimilation suggests that the accumulation of host society specific human capital may not always result in upward economic mobility. Unlike the type of immigrants typically assumed in the conventional model of positive assimilation, those immigrants with readily transferable global skills do not necessarily gain economically from assimilation or time spent in the host society. Chiswick and Miller (2011), however, do not clearly show what kind of skill is valued and how the host society-specific human capital they gradually acquire affects their wages. To clarify these, we now show how immigrants “make it” and who “makes it” in Japan by comparing the effects of human capital acquired in Japan and abroad.

### I II. Data and Methods

## Data
The data used for the analysis were collected by a web-based survey in Japan between the months of February and April, 2012. We conducted the survey through a research company that specialized in immigrant communities and had a large number of foreign nationals as their monitors. Among those monitors, we included in our analysis only “newcomers” who came to Japan after the passage of the new immigration law in 1989 (thus excluding multi-generational long-term Korean residents who became incorporated into Japan under different circumstances). In order to analyze immigrants’ economic incorporation and social mobility over time, we focused on non-students, aged 16-69, who had resided in Japan for at least 3 years so as to exclude temporary visitors and residents. Our sample targeted 4 major immigrant groups in Japan: (1) Chinese, (2) Koreans, (3) South Americans (Brazilians and Peruvians), and (4) so-called “Westerners” from 5 English-speaking countries (USA, UK, Canada, Australia, and New Zealand). According to the latest immigration statistics available, these 4 groups together constituted more than 85% (1.18 million out of 1.39 million) of foreign “newcomers” $ ^{7} $ in 2011 (Ministry of Justice 2012b). For the purpose of our analysis, we excluded immigrants from South America who were under-represented and further restricted the sample to those who had at least some college education and were residing in the Kanto and Kansai metropolitan areas at the time of the survey in order to control for regional differences. $ ^{8} $ In the end, this yielded a total of 405 immigrants in our sample (84 Chinese, 212 Koreans, and 109 Westerners).
Although the sample is neither representative nor generalizable of the nation’s entire foreign population, it nevertheless captures a substantive segment of the population: the educated and skilled targeted by the Japanese government. Also, it more or less corresponds to the population of our interest--educated and skilled “newcomers” from China, Korea, the U.S. and the other major English-speaking countries currently in the Japanese labor market. Those individuals tend to be highly educated and urban as a whole. According to the Japanese Census (2010), 82% of Americans, 37% of Chinese, and 31% of Koreans $ ^{9} $ surveyed responded that they graduated from college or graduate school, and over 60% of Chinese, 70% of Koreans, and 65% of Americans were residing in the Kanto and Kansai metropolitan areas (Ministry of Justice 2012). Since urban residents tend to be more educated and engage in professional occupations (Census 2010), we believe that our sample, though skewed toward an “elite” segment of the population, is sufficiently generalizable to analyze how the kinds of immigrants targeted by the Japanese government fare and achieve economic mobility in Japan.

Web-monitoring survey, which has grown popular in Japan, necessarily entails sampling bias and measurement errors (Honda 2007; Couper 2000), however. It tends to draw on the educated who are computer-savvy and affluent enough to afford computing equipment. Nevertheless, it may be the best possible option in Japan where random-sampling is nearly impossible to draw among foreign residents due to a lack of large-
scale systematic data and of the reliable registration system in place $ ^{10} $ . To date, the Census, which began to collect information on foreign residents in 1995, is the largest dataset available. Yet, given its limited information and access to micro-level raw data, it does not allow us to fully analyze immigrants’ socioeconomic integration by taking into account crucial factors such as income, Japanese language proficiency and the year of immigration to Japan (See for instance, Korekawa 2012; Omagari et al. 2011). Under these circumstances, web-monitoring survey is the most feasible method to gather large-scale micro data on foreign residents in Japan.

## Models

In order to address our research questions of how immigrants achieve economic mobility and how their host country-specific human capital helps achieve it, we ran two sets of regression models (Models I and II). The first set of models (Models I) is based on economic assimilation empirically demonstrated by Chiswick (1978, 1979) along with others (e.g., Borjas 1993; Portes and Rumbaut 2006). Consistent with classic assimilation theory, it stipulates that human capital accumulated in the host society, commonly measured as the number of years in the destination, is a key predictor of immigrant earnings. This is commonly expressed in the following mathematical equation where the wage of an individual worker i is a function of years since migration (hereafter, YSM) in combination with other control variables:
$$ \log(W_{i})=\alpha+X^{\prime}{}_{i}\beta+\gamma YSM_{i}+e_{i} $$

where $ \log(W) $ represents the natural logarithm of individual annual earnings being examined, X is the vector of individual characteristics to be controlled for, such as age, years of schooling, and gender, and e is a random disturbance with mean zero and constant variance.

We first tested this model with YSM as the key independent variable (Models I-a and I-b). If the coefficient of YSM is positive and statistically significant, it implies that immigrants' earnings improve with duration in the host country (i.e., positive assimilation). If the coefficient is negatively significant, however, it alludes to negative assimilation; earnings decline with the passage of time in the destination.

We then added another crucial measure of host society-specific human capital--education acquired in Japan—to test its effects on earnings (Models I-c and I-d). The positive and statistically significant coefficient of this variable would support previous studies concluding that locally obtained education helps immigrants earn higher wages. If, on the other hand, the coefficient is negative and statistically significant, we would conclude that skills and credentials specific to the Japanese labor market are not as valued as skilled directly brought from abroad.

For the second set of models (Model II), we ran separate regressions for two regions from which immigrants in our sample originated—China, Korea and the English-speaking West (the U.S., the U.K., Canada, Australia, and New Zealand). Based on previous studies that found differential effects of foreign degrees, we tested, first, whether the value of foreign credentials varies by region of origin, and second, whether such value is observed only in a specific region of origin. Thirdly, we also tested whether
the overall determinants of earnings differ depending on where immigrants come from. By running these separate regressions by region of origin, we aimed to clarify how negative assimilation works, when it occurs, and for whom.

## V ariables

Table 1 summarizes all the variables used for the models. The dependent variable is the natural logarithm of annual wage before tax deductions during the 2011 calendar year. The response category in the original questionnaire ranged from 1 (=no income) through 16 (=more than 15 million JPY). We set the minimum (1=no income and 2=less than 0.5 million JPY) to zero and maximum (16=more than 15 million JPY) to 15 million JPY. Then, we took the median value for categories between 3 (=0.5 million-0.99 million JPY) and 15 (=10 million-14.99 million JPY).

One of the key independent variables, YSM, refers to the length of time in Japan, measured as the number of years since first arrival in Japan. Another key independent variable, the place in which the highest degree was earned, is based on the question of whether the degree was earned in Japan, country of birth, or a third country. Since relatively few earned their degrees in a third country, we combined the latter two as foreign degrees as opposed to degrees earned in Japan. This variable is intended to measure the type of human capital, whether it was invested and acquired pre-migration abroad or post-migration in the host society.

The education variable is a measure of general human capital, or education acquired in any country. It is expressed as a series of dummy variables that correspond to degrees conferred at different educational levels (two-year college, four-year college, and
graduate school). We used these discrete variables, instead of the continuous variable (or years of schooling) commonly used in wage analysis, because as it has been frequently pointed out (e.g., Kawaguchi 2011), degrees are a better measurement of return to education than years of schooling in Japan. Each of the dummy variables is expressed as “one” if an individual completed a certain level of education (i.e., two-year college, four-year college, or graduate school) or otherwise, “zero”; the reference group in our models is set to four-year college.

In addition to these key variables, some other variables deemed to affect productivity, and hence earnings, are included in the models as controls. They include father’s education $ ^{11} $ , gender, working hours per week, firm size, Japanese proficiency, and English proficiency. Father’s education is used as a measure of one’s socioeconomic background. Numerous studies have found that father’s socioeconomic status is strongly related to one’s economic attainment, either directly or indirectly (e.g., Tachibanaki 1988) $ ^{12} $ . Gender, the number of work hours, and firm size have also been identified as crucial determinants of earnings, particularly in Japan; males generally earn more than females, net of other factors, as do employees of larger firms and individuals who put in more hours at work (e.g., Statistics Bureau of Japan 2012; Sano and Yasui 2009). Japanese proficiency is measured on a 4-point scale (1=little; 2=not so good; 3=average; 4=good) based on the subjective evaluation of respondents’ writing abilities. English
proficiency, measured similarly on a 4-scale point, is also added to our models, as it has frequently been identified as a crucial skill valued in the Japanese labor market (e.g., Watanabe 2003).

The descriptive statistics summarized in Table 1 show that the average immigrant in our sample is 31 years old with a foreign college degree and has lived in Japan for 8 years; currently, s/he engages in full-time employment, working 8 hours a day at a medium or large-sized firm. The average annual wage of 5.25 million JPY is significantly more than the national average, 4.12 million JPY, among all employees in Japan in 2010 (National Tax Agency 2012).

Table 1 also shows a substantial difference between immigrants from Asia and the English-speaking Western countries included in our analysis; immigrants from the West are economically more advantaged, on average, than their Asian counterparts. Specifically, the average immigrant from the West earns 6.21 million JPY annually, over 1 million JPY more than the average Asian (4.89 million JPY). This may reflect the difference in their human capital; Westerners tend to be slightly older (32.7 years old as opposed to 30.4 years old for Asians) and more educated (25% of Westerners hold a graduate degree compared to 20% among Asians). Yet, they earn significantly more, even though their level of Japanese proficiency is lower (a score of 2.8 as opposed to 3.5 for Asians) and fewer of them earned their degree in Japan. In short, there is a significant difference in their characteristics between these groups, which may affect the pattern of economic mobility.

### I V. Results
## Baseline Model (Model I-a and Model I-b)

Our analysis begins with a baseline model (Models I-a and I-b in Table 2), based on the entire sample, to assess the applicability of the assimilation model, either positive or negative. The standardized coefficients estimated by Ordinary Least Squares are reported in Table 2, along with the heteroskedasticity-robust standard errors. Model I-a includes only a linear variable for YSM, and a quadratic YSM is added in Model I-b. Overall, the coefficients of the variables included in the models are mostly significant in predicted directions. Being male and older age increase wages, as does the higher level of parental socioeconomic status. One also earns more by working longer hours and at a larger firm. Higher education degrees, regardless of where they were earned, also help increase wages, as the returns to two-year college education are lower than the returns to four-year college education at the 5% significance level. However, the difference in returns between four-year college education and graduate education is statistically indistinguishable from zero, holding other conditions constant. This is consistent with prior findings that graduate degrees often do not yield higher wages than four-year-college degrees in Japan (Murasawa 2011) $ ^{13} $ .

The most remarkable result here is the negative effect of YSM. In both Model I-a and Model I-b, the linear variable for YSM is negatively related to earnings, while the coefficient of quadratic YSM is positively and statistically significant, holding the other variables constant. These results suggest that the duration of time in Japan appears to bear no significant advantage in the process of economic mobility; immigrants who stay
long in Japan earn less, on average. This clearly supports the negative assimilation thesis. Unlike Chiswick and Miller’s model (2011) that was confined to a specific segment of the immigrant population (adult males from advanced English-speaking countries), negative assimilation is more broadly applicable in Japan. Contrary to Western countries where immigrants typically experience positive assimilation, immigrants in Japan, at least the skilled and educated targeted by the government, appear to undergo a different process of economic assimilation $ ^{14} $ .

## Extended Model with Country Specific Human Capital (Model I-c and Model I-d)

To further explore the role of location-specific human capital, we next tested the effect of the place where the highest degree was obtained. It is measured as a dummy variable coded as 1 if the degree was completed in Japan and 0 if otherwise. The results of Model I-c and Model I-d (See Table 2) show that the coefficient of this variable is negative and statistically significant, suggesting that education acquired in Japan is negatively related to immigrants' wages. What it implies on the flip side is that skills brought from abroad contribute more to higher wages in Japan; there is a labor market premium on foreign skills and credentials. Note that the effect of general education (the returns to two-year college education as opposed to those to four-year college education, regardless of where degrees were obtained) observed in Models I-a and I-b disappears when the place of the highest degree obtained is inserted in Models I-c and I-d. This indeed suggests that the type of education (whether education is attained in the host