In the United States, Canada and the United Kingdom wage inequalities widened rapidly in the 1980s. The other developed countries seem to have experienced higher unemployment rates. Western economists indicate that economic globalization and technological changes are possible causes. But these environmental changes are exactly what Japanese manufacturing industries have experienced. They have also experienced rapid aging of their labor forces and high educational upgrading. In this paper, I carefully examine the changes in the wage structure of manufacturing industries for more than thirty years, and analyze the effects of environmental changes on them. The main results are (1) that the age-wage differentials did not shrink in spite of the recent growth of and the reduced relative demand for older workers ; (2) that the college graduates/high school graduates differential shrank until the middle 1980s because of the increase in the college graduates relative supply, and that recently both the wage differential and the relative supply have been stable ; (3) that the nonproduction/production differential has been shrinking over the three decades while nonproduction workers have been relatively increasing ; (4) that the shrinking of the gender differential has been very modest ; and (5) that the overall wage dispersion shrank greatly during the 1960s and has been shrinking continually until the present.
