# Transnational career advantages: earnings growth of Japanese self-initiated expatriates

## TL;DR

Japanese workers who move abroad for work see better earnings growth than those who stay in Japan, challenging traditional views of career advancement.

## Contribution

This study provides empirical evidence on the economic benefits of transnational careers for Japanese workers.

## Key findings

- Japanese expatriates experienced about 6% annual earnings growth compared to 1% for domestic workers.
- Expatriates in multinational companies earned more than domestic workers, while those in Japanese-owned companies had similar earnings.
- The economic penalty for returning to Japan was largely due to job characteristics and not the return itself.

## Abstract

Japanese workers have experienced prolonged wage stagnation for over 30 years, leading some young and middle-aged people to seek economic opportunities abroad. While self-initiated expatriates (SIEs) represent a growing segment of Japan’s international workforce, their economic outcomes compared to domestic workers remain underexplored. This study examines whether Japanese SIEs achieve superior earnings growth compared to domestic workers and assesses the economic implications of returning to Japan.

Using longitudinal survey data from the ADIOS-J project (2020-2022) tracking Japanese expatriates and the JLPS dataset for domestic workers, we tested two hypotheses: (1) Japanese SIEs experience higher earnings growth than domestic workers, and (2) returning to Japan economically penalizes SIEs. The analysis controlled for observable and unobservable factors affecting earnings trajectories with random and fixed effects models.

Japanese expatriates experienced approximately 6% annual earnings growth, while domestic Japanese workers’ earnings remained virtually stagnant (around 1% annual growth). Earnings levels varied significantly among expatriate categories—SIEs in multinational companies earned more than domestic workers, while SIEs in Japanese-owned companies had comparable earnings to domestic workers. The apparent economic penalty for SIEs returning to Japan was largely explained by job characteristics and pre-migration conditions rather than the return itself.

These findings reveal that transnational careers economically benefit Japanese middle-class workers, challenging conventional views of upward mobility occurring primarily within domestic labor markets. Despite theoretical and empirical issues to be addressed in the future studies, the research contributes to understanding middle-class migration from high-income countries within Asia’s rapidly growing economic centers, suggesting that international mobility can serve as an alternative pathway for career advancement when domestic opportunities are limited.