The Evolution of Knowledge in the Labor Force during Industrial Structuring in Japan.

This paper tracks the progression of knowledge levels in the labor force between 1975 and 1985 in the Japanese economy as a whole and it's fifty-three component sectors, utilizing a measure of knowledge which reflects the worker's educational level and vocational preparation, verbal, numerical and analytical capability and his/her ability to synthesize inferences and knowledge. The links between the worker's knowledge levels and the economic fortunes of industries are inferred for various sectors particularly those with divergent patterns of comparative advantage. Changes in the levels of knowledge embodied in all workers in the different industries are decomposed into their sources: technical change, changes in the structure of final demand, changes in labor productivity, and the changes in the component structure of occupation. The analysis of these sources highlights the facilitating role of human capital changes in Japan in an era of considerable structural change.