The Japanese Tertiary Education System and Its Impact on Economic Conditions from 2000 to 2010: Human Capital Formation

The Japanese Tertiary Education System and Its Impact on Economic Conditions from 2000 to 2010: Human Capital Formation

Erin Lee Kalkbrenner (Lindenwood University, USA)
DOI: 10.4018/978-1-4666-8411-9.ch018
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Abstract

Researchers have calculated the relationship between human capital development and economic output by various means of econometric modeling and by use of numerous indicators under the context of an assortment of human capital theory. In this chapter, new interpretations of the expansion of human capital in the form of tertiary education enrollment and the impacts of various economic conditions in Japan from 2000 to 2010 are identified. Data was collected from UNESCO UIS, OECD, and the World Bank on tertiary enrollments, tertiary expenditures, and other measures utilized during modeling. This chapter applied an OLS non-linear regression in efforts to estimate optimization of tertiary education enrollment to maximize the real growth rate in the Asian region, specifically through the use of point estimates for Japan. Government and educational policy recommendations were made based on computed outputs.
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Background

Human capital, broadly, is the accumulation of knowledge and intelligence of an individual that is calculated by that individual’s ability to carry out labor in efforts to generate economic value (Becker, 1993). Just as physical capital can be calculated, human capital can be measured for the purpose of quantifying one’s ability to produce labor by his or her knowledge capacity. Human capital theory proposes that the expansion of skills and knowledge creates a form of capital that is definable and valuable to society. Becker (1993) explained the phenomenal growth of the Asian nations, notably Japan, China, and Taiwan, which, while lacking natural resources, exuded an amazing potential through use of “a well-trained, educated, hard-working, and conscientious labor force” (p. 24). This cycle of events justifies the exploration of expanding higher education to strengthen knowledge capacity and economic productivity via the medium of human capital acquisition.

The researcher conducted this study to identify new insights into the development of human capital in the form of tertiary education enrollment and the analysis of tertiary level educational policy implementation in Japan from 2000 to 2010. This research tests if it is, in fact, that increased tertiary education enrollment surreptitiously effects the expansion of human capital to eventually create an increase in economic output, most commonly reported in terms of GDP or GDP per capita. A historical review of educational systems and policies and cultural educational norms aided in answering the question of how the Japanese economic conditions were impacted by its educational system and vice versa. The implications of this model are valuable to governments, researchers, economists, educators, and other organizations that collect data and provide programs to initiate change in education systems.

Key Terms in this Chapter

The World Bank Group: Provides economic and procedural support to developing countries with goals of reduction of poverty and societal progression. The World Bank Group consists of five organizations with 188 member countries who act as shareholders and policymakers, typically through each country’s minister of finance or development (The World Bank, About, 2014 AU91: The in-text citation "World Bank, About, 2014" is not in the reference list. Please correct the citation, add the reference to the list, or delete the citation. ).

Human Capital: The accumulation of knowledge, particularly from formalized education, expressed as the individual human capability to complete some form of labor that produces economic value to society ( Becker, 1993 ).

Higher Education: In most countries, it is synonymous with tertiary education, where in others (i.e. Great Britain), higher education includes undergraduate and graduate education, but does not include vocational education. For this study’s purpose, it will use tertiary education to align with OECD verbiage. Higher education does not formally include vocational education.

Gretl: Gretl is an open-source program which stands for GNU Regression, Econometrics and Time-series Library; Gretl is similar to SPSS or STATA, but is a free statistical package found online.

Tertiary Education: Broadly refers to all post-secondary education, including but not limited to universities; including public and private tertiary institutions, colleges, technical training institutes, community colleges, nursing schools, research laboratories, centers of excellence, distance learning centers, and many more (The World Bank, Tertiary Education (Higher Education), 2012).

Member Country: A country that is a member of the Organisation for Economic Co-operation and Development. There are 34 member countries currently in the OECD.

Gross National Product (GNP): “The sum of value added by all resident producers plus any product taxes (less subsidies) not included in the valuation of output plus net receipts of primary income (compensation of employees and property income) from abroad” (The World Bank, GNI (current US$), 2013). The traditional calculation of GNP is currently referred to as Gross National Income (GNI) in present use.

USD/US$: United States dollars. Data will be denoted if in this form with USD or US$.

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