Cultural fluency required? Interrogating ethnocentrism in the employment of white-collar Asian migrants in Japan

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Abstract Scholars contend that Japanese firms hold white-collar foreign workers to a high bar for assimilation. This model of the ethnocentric firm suggests that Japan’s growing number of foreign-educated white-collar migrants should face steep labor market penalties compared to migrants educated in Japan because they have had fewer opportunities to familiarize themselves with Japanese working styles and norms. We test this hypothesis using a sample of 546 Asian white-collar foreign workers. However, we find that, robust to controls for compositional differences in the foreign- and Japan-educated migrant populations, foreign-educated migrants earn more. Since wage penalties for foreign degrees are ubiquitous in other national contexts, this finding counterintuitively implies that, at least in evaluation and rewards, Japanese firms may be less ethnocentric than the global norm.