Job Tasks, Skill Formation, and Wages : An Internal Labor Market Approach

We integrate the task approach and skill formation model in the internal labor market theory. As a skill measure, “intellectual skills” to deal with changes and problems in the workplace is used. We highlight the institutional aspects of the task approach and quantitatively show the mechanism of tasks, skills, and wage determination through the working of the internal labor market. Using the original survey in Japan, we find that the country-specific skill formation system influences task allocation. Additionally, task polarization occurs through the “ micro” economic factor of the internal labor market. Further, we find that non-routine tasks positively impact intellectual skills, but intellectual skills do not necessarily increase wages. Finally, job tasks and intellectual skills have the same power as wage predictors