The Economics of Education in Japan: A Survey of Empirical Studies and Unresolved Issues

Abstract

The purpose of this article is to survey the empirical studies on education in Japan and to identify the issues yet to be addressed by the research. We divide the existing studies into six categories: (1) human capital theory and rates of return on education, (2) the labor market and education, (3) factor analysis of educational performance, (4) industrial analysis of education, (5) determinants of education demand, and (6) education and social stratification. We then compare the purposes, methodologies, conclusions, and policy implications of the studies discussed. There is an abundance of literature on each topic and we found many insights provided by noneconomic approaches, such as education sociology, that are also of interest from an economic viewpoint. A lack of data, however, limits empirical analysis and leaves many problems unresolved.

The following four issues in particular remain to be resolved. First, there are relatively few empirical analyses on educational performance in Japan as compared with countries like the United States, and long-term panel data that include educational background information need to be developed. Second, a certain level of liberalism is being allowed in school education at the municipal level, expanding the opportunities for conducting analyses of educational performance based on cross-sectional data. Third, additional analyses of education from the perspectives of industrial organizational theory and business management need to be performed in light of the conversion of the national universities into independent administrative institutions. Fourth, some topics are conducive to joint research by scholars in the fields of economics and education sociology, such as the relationships between education and social stratification, and between education and income disparities.