2
Introduction: Human Capital and Social Capital in the Immigrant Labor Market
A common method of wage determination analyzes earnings based on human capital
attainment, such as age, education and work experience (Becker 1975; Ben-Porath 1967; Mincer
1974). Recent work on immigrant earnings includes language proficiency and work experience
in the host society as additional human capital measures (Borjas 1995; Portes and Rumbaut
2001; Sanders and Nee 1987; Zhou and Logan 1997(? date)). Yet, such factors may not explain
immigrants’ earnings in other countries, where foreign workers encounter different social and
economic contexts. As Portes and Rubaut (1990; 2001) have noted, it is the combination of what
immigrants “bring with them” as well as the “context of reception” that affects labor market
incorporation (Portes and Rumbaut 1990:83-85; 2001: 46-48).
To explore this issue, we compare the earnings of foreign workers in Japan and the
United States. We argue that human capital variables differentially influence foreign workers’
wages and labor market incorporation in Japan and the United States because different
socioeconomic labor market conditions prevail in these two societies. Japan is a recent country
of immigration with a less developed and diversified immigrant labor market, compared to the
United States. Since most foreign workers are employed as causal, unskilled workers with
limited job mobility; education, language proficiency, and work experience do not necessarily
lead to better job prospects and higher wage levels. However, social capital, such as information
channels or reciprocal obligations, provides resources that facilitate labor market incorporation,
leading to higher wages in Japan. Moreover, gender and ethnic discrimination is more prevalent
in Japan than the United States. This creates a discriminatory labor market where Japanese
employers strongly prefer male foreign workers and ethnically-related nikkeijin immigrants, both
Convention