Deregulation and labour earnings: Three motor carrier industries in Japan

We empirically examine the effect of product market deregulation on wages. The difference-in-difference approach is used with wage data from three motor carrier industries (the taxi, bus and trucking industries) in Japan to obtain the following findings. First, deregulations in the 1990s and 2000s caused the relative wages of taxi and bus drivers to decline, but this was not the case for truck drivers. Second, the large decline in the relative wages of taxi drivers can be explained by the deterioration of economic conditions; their wages are more sensitive to labour market conditions than those of drivers in other industries.

Research Highlights
► We empirically examine the effect of product market deregulation on wages.
► The DID approach is used with wage data from three motor carrier industries in Japan.
► Deregulations in the 1990s and 2000s caused the relative wages of taxi and bus drivers to decline.
► The large decline in the relative wages of taxi drivers can be explained by the deterioration of economic conditions.