Japan conference.

• Position: Conference on Japanese economy by National Bureau of Economic Research, Center for International Research, Centre for Economic Policy Research and European Institute of Japanese Studies

The high correlation between graduating from a selective college and success in the labor market has been observed in many countries. There are two major explanations for this finding: either graduating from selective colleges causes success in the labor market because of better education, a better alumni network, or something attached to selective college graduation, or the correlation is created by a "third" factor, such as selective college graduates' high innate ability, or better family background. Kawaguchi and Ma attempt to test the latter hypothesis by using a natural experiment. The most selective university in Japan, the University of Tokyo, did not admit new students in 1969 because the university could not administer its entrance examination; there was a campus lockout by armed, leftist students, who demanded university reform. Consequently, many of the 3,000 high school graduates who would have been admitted to the university went to other, second-best universities that year. The authors ask whether the 1973 graduation cohort of these secondbest universities performed better than other graduation cohorts of the same universities. Using the 2002 Who's Who for publicly traded companies and the central government, they find little evidence that the 1973 graduating cohort from the second-best universities performed better than other cohorts. This finding rejects the hypothesis that the Tokyo graduates' success is explained solely by their innate high ability.

Ono and Odaki examine differences in the wage structure of domestic versus foreign-owned establishments in Japan. Using high-quality wage datasets from the Japanese government, they construct a large employer-employee matched database consisting of 50,000 establishments matched with a sample of approximately one million workers in 1998. Their results confirm that foreign-owned establishments in Japan pay higher wages than domestic establishments, even after they account for human capital and industry composition. A single percentage point increase in the foreign ownership share of equity is associated with a 0.3 percent increase in wages. These results also highlight the distinction in the structure of wages between domestic and foreign-owned establishments. Tenure effects on wages are considerably weaker among foreign-owned establishments, where wages are determined more by general skills as observed by the higher returns to education and work experience. Women in...