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12.03.2015 г.

Coverage, Equal Access and University Reforms in Japan

Andrei Belov, Doctor of Economic Science, Professor, Fukui Prefectural University, Japan

Socioeconomic Environment Affecting University Education in Japan

In the early 1990s, Japanese universities faced funding cuts, declining number of students, and at the same time, felt the need to enhance their quality of education as an essential component of national competitiveness. A broad public discussion outlined the direction and mechanisms of university reforms, which were implemented in the middle of 2000s. In the past two decades, Japanese universities have undergone a series of reformations that have produced certain outcomes and provided a bulk of information, which are scarcely available abroad. Russia, who is also experiencing major transformations in its higher education system, faces a similar situation of shrinking financial resources and the need to use them more productively. Given these commonalities, the experiences and learnings of Japanese reformers can be of particular interest to Russia.

National, public, and private universities in Japan

Historically, higher education institutions in Japan developed under the strong influence of Humboldt University of Berlin's principles of state funding, academic autonomy, and the universal scope of education and scientific research. After the World War II, Japan adopted many organizational concepts similar to those in the United States, namely the unification of educational institutions, increased private financing, and academic degrees and credits. There was a rapid growth in the number of private and public (regional) universities during the 1960-1975 and 1990-1995, owing to the less stringent laws to establish new institutions by the Ministry of Education, Culture, Sports, Science and Technology (hereinafter MEXT or Ministry of Education).

The expansion of the higher education system can be largely attributed to structural changes, for example, former colleges were upgraded to universities. However, this quantitative expansion resulted in decreased control by the MEXT, thus worsening the quality of education. The prolonged depression and deteriorating public finances strongly influenced the Japanese society of the late 1990s in developing a firm opinion that the higher education system did not meet the needs of the time. As a result, during 2003-2004, the MEXT began to redefine the management structure, financing principles, and assessment methods, which were applied to national and later public universities. Although this "Big Bang" in Japan's higher education system provoked strong criticism in the academic community, by the end of the decade, almost every suggestion to upgrade the system was implemented, which led to its overall improvement.

Presently, Japan's universities comprise three types of institutions- national, public (regional) and private-classified by the form of ownership. The highest number of universities is privately owned; however, in terms of quality of education, national institutions supersede the rest. The latter is concluded from numerous regular rankings that are based on aspects typical of a higher education institution: (1) selectivity of universities and rigor of entrance criteria (published since 1974 by Kawai and Yoyogi cram schools), (2) integrated assessments of university status for high school graduates and their parents (Asahi Shimbun, since 1994), (3) students' and graduates' satisfaction with quality of education (Recruit, since 1997), (4) university's brand recognition (Nihon Keizai Shimbun, since 2004), (5) teaching and research quality (Yomiuri Shimbun, since 2008), (6) financial position, material resources, and management's network/understanding of potential investors employers' opinions of potential investors (Toyo Keizai, since 2008), and (7) performance of Japanese universities in global rankings, such as ARWU, THE, QS, and Asian Universities.

Quantitative characteristics of Japanese universities (2011)

Number of institutions
percent share
Number of employees*
percent share
Number of students
percent share
Number of undergraduates
percent share
Number of postgraduates
percent share
*Tokai University Higher Education Research Institute [2010:97]
Source: MEXT,

The National Seven Universities occupy the top of the pyramid in all qualitative indicators. They are traditionally specialized in natural sciences, fundamental research, and trainings for government services. Among the private universities, only Waseda and Keio provide world-class research and development programs, while the others are a highly diversified group of institutions that significantly differ by size, level, and field of research. Public universities fall in between. The established hierarchy and division of labor are universally acknowledged, fixed, and highly unlikely to change in the foreseeable future.

Every national university since 2004 has been incorporated as a "national university corporation." They are each governed by a president (rector) and board of directors (pro-rectors) with sweeping powers to determine the level and procedure of professor and teacher remuneration, employment terms, and budgetary expenditures. The rector is elected by the board of directors from among the candidates put forward by university departments or the founders. Members of the board of directors are appointed either by the rector or by the founders. Neither the rector nor the pro-rectors are allowed to continue working in their respective universities once their term in office has ended. The rector and pro-rectors supervise faculties, research departments, affiliated institutions, and the administrative office. Emerging issues are discussed with management advisory committees and education and science committees and the participation of independent experts is mandatory.

Between 2005 and 2010, most public universities were incorporated as "public university corporations" and obtained an organizational structure similar to those of national university, which was further configured by the universities' founders. Thus, the management of national and public universities is almost identical to that of a typical private institution.

Coverage of and equal access to higher education

During the 1930-1940s, only 1-3% of Japanese school graduates could afford higher education. Postwar reforms expanded access to higher education to 9.8% in 1956 and 10.3% in 1960, and factors such as demographic changes, explosive economic growth, and vigorous government policies expedited the increasing student enrollment. By 1975, the rate of university enrollments almost tripled to 27.5%, which can be largely attributed to private educational institutions. At the time, Japan sharply increased access to higher education by shifting expenditures to individuals, rather than increasing government spending. Unfortunately, along with the expected benefits, it deteriorated education quality and available facilities and increased tuitions in the private sector. In response, the government tightened control over establishments of new universities, imposed facility standards, and provided state assistance to private institutions. As a result, the proportion of school graduates advancing to universities declined to 25.1% in 1990.

The past two decades have witnessed another wave of higher education expansion, which can be divided into two phases. The first was in the early 1990s, when the government simplified the procedure of upgrading colleges to universities and that of regional authorities establishing higher education institutions while retaining existing standards. It was during this period that most prefectures in Japan independently established public (regional) higher education institutions with satisfactory facilities and skilled staff. The second phase began in 2003, when the government was required to revoke certain standards and restrictions (e.g., foreign language and physical training as compulsory subjects) under their extensive administrative reforms. In fact, the government adopted a type of laissez-faire policy toward the private sector of higher education (i.e., the right to refuse both stringent control and extensive support) and authorized the establishment of new private universities. By 2011, 49.1% of high school graduates continued to receive university education. Further dynamics of university education expansion depended on the cohort size of 18 year olds, the structure of tertiary education institutions, financing opportunities, labor market demands, and Japanese population's preferences.

In 1991, the number of high school graduates in Japan peaked at 1.81 M. By 2009, this number declined to 1.21 M and is expected to further decrease to around 1.09 M by 2024. While the number of Japanese universities rose from 523 in 1992 to 780 in 2011, primarily owing to private educational institutions, that of promising students continues fall. As of May 1, 2012, student enrollment was below capacity in the 246 private universities of which 18 had more than 50% seats vacant. This increased competition for student enrollment and compelled numerous private institutions, mainly small and provincial ones, to relax their requirements and accept almost any candidate willing to pay. Consequently, although the number of school graduates with access to university education increased, it widened the gap in education content and quality among different types of universities.

The number of private universities was rising basically because of the decreasing flow of students to short-term universities and special training schools. The rate of school graduates opting for short-term universities and special training schools reduced from 25% and 36% in 1991 to 6.3% and 22.9% in 2011. Subsequently, the number of such institutions dropped from 591 to 372 within the same period of time. This shift in preference can be easily explained by economic factors. First, employment opportunities in Japan positively correlated with educational levels. In 2011, among those aged 24-65 years, 61% with secondary education, 66% with secondary vocational education, and 68% with higher education were employed. Second was the declining unemployment rate, which was 5.0, 3.9, and 3.0%, respectively. Third, remuneration generally increases faster for employees with a university degree than a college diploma. In 2007, the remuneration rate for university graduates was 48% higher that of employees with secondary education. In addition to economic factors, emerging social trends such as women's education and the transfer of vocational training to universities contributed the existing preferential shift. Traditionally, women constituted the majority of student population in short-term university education, which was later deemed insufficient to secure a job, given the growing numbers of women seeking employment. Another influencing trend in Japan's social welfare system was the transfer of nurse and social worker trainings from colleges to regular universities. Given that these socioeconomic factors continue to have an effect even currently, the substitution of colleges with regular universities is highly likely to last in the years to come. In addition, various underlying socioeconomic changes can help determine future developments.

Over the years, the Japanese lifetime employment model has undergone several changes, deviating from its traditional pattern, with the following trends gaining much popularity: non-regular employment (from 16.4% in 1991 to 35.2% in 2012), young employees switching jobs in the first three years of employment (from 9.4% in 1999 to 15.3% in 2008), and fewer employers offering on-the-job training (from 9.1% in 1994 to 5.1% in 2008). Thus, it is no surprise that recruitment policies have started to shift its focus from hiring young university graduates to experienced professionals.

Other forms of training programs have been developed to replace those in companies. However, the increase in number of lifelong learners has been insignificant. In 1998, only 2% students in Japan were over 35 years of age (the lowest among OECD countries), and in 2011 this figure increased to only 2.3%. Nevertheless, Japan has shown a positive rate of return on education, which was very low until recently. During 2005-2006, the rate of return in Japan was 5-6% against the average 14% in the EU and 12.3% in the United States.

In addition, employers' expectations from the education system have changed. At first, the key criterion for employee value was learning ability, which was judged by one's admission to a prestigious university rather than educational content. However, over the past few years, employers have increasingly emphasized leadership, decision making, and communication skills. Employer representatives have strongly criticized the quality of higher education and the university system as being responsible for this gap.

Coverage of population with university education is also affected by accessibility of the latter. Japan has made considerable progress and stands out in this regard. When compared to other OECD countries, performance of Japanese students in primary and secondary schools correlates much less with their social background and family income [Ichikawa 1991:18]. In addition, corrupt practices and power abuse are rare cases when students enter universities or take the National Center Test for University Admissions, which is similar to the Unified State Examination in Russia (While working for 16 years in a Japanese university, it was only once that I read in a newspaper about an exam leak in Japan. The case involved a question sheet of an upcoming test being used in pre-entry courses). Finally, Japan has a highly diversified network of tertiary education institutions that provide ample learning opportunities. Persistent and deliberate government policies have helped achieve the uniform distribution of educational institutions across the country, providing many with an equal access to education. In particular, at least one national university had to be established in each of the 47 prefectures. By establishing national universities with standardized education at subsidized prices, students from low-income families were able to access higher education. OECD experts believe that Japan's provision of equal access to education should be aimed at maintaining what has already been achieved, although problems do exist.

First is the dramatic gender gap: 51.3% male and 36.8% female school graduates enrolled at universities in 2009; 15.1% male university graduates advanced to post-graduate schools as compared to 7.7% women. Women represented only 10% (6.1% in national universities) of the total number of university professors. Improving this situation will require a considerable amount of time and depends on numerous factors: dynamics of women employment, size of education premium, changes in the types of relationships in the academic community, and the redefinition of work-home balance.

Another problem that has gained much attention in the past years is the increasing social inequality. The Gini coefficient for per capita income in Japan is steadily rising and has been higher than the OECD mean value since 2005. Meanwhile, aggregate personal income has been falling with similar persistence. Between 1995 and 2012, the index of monthly average wages has fallen by 11.5 points. In addition, the drop in income of young graduates who have not yet found a permanent job has largely aggravated inequality.

The next factor of inequality affecting access to education is that in 2005 Japan's total household spending to raise a child from birth through university graduation was estimated at roughly 21 M yen (about 200,000 dollars), while the average household income was 5.7 M yen (about 53,000 dollars). During primary and secondary education, a major share of the family budget is directed to private cram schools that prepare students to pass entrance examinations for high schools and universities. In other words, parents' income determines children's opportunities for additional training and, thus, largely defines the level of accessibility to educational institutions. Families of students who entered the prestigious University of Tokyo in 2013 had an average income of 10 M yen (about 100,000 dollars), which is almost two times the average national income. Ideally, expensive cram schools can be substituted by a home setting conducive to independent learning; however, this requires families to consistently guide the child throughout their education. Unfortunately, such guidance is not considered important by all Japanese families. This socioeconomic phenomenon is clearly demonstrated by the fact that during the 2000s, 60% of educated professionals' children and only 15% of farm workers' children graduated from universities.

Government policies in Japan did not include effective measures to reduce income inequality. Thus, in the 2000s, the university education system was dominated by middle- and high-income social groups, while the low-income population was left with fewer opportunities for a university education. With the widening wealth gap, real income dynamics, the heavy cost of private cram schools, narrowing opportunities for public finance, and the relatively high and continuous growth in tuition payments, it is highly unlikely that children from low-income families will gain access to university education in the near future. Unfortunately, measuring the percentage of population that will be deprived of a university education is difficult owing to the lack of crucial long-term economic and public finance forecasts.

In countries with fee-paying schools, the state can regulate access to education by providing student financial aid such as grants and loans. However, in Japan, the grant and scholarship system is relatively weak. During 2010-2011, only 3% students benefited from the system. In addition, zero- and low-interest student loans were obtained by only 33% college and university students as compared to 71% in the United Kingdom and 76% in the United States. As a rule, loans must be repaid five years after graduation through monthly installments, irrespective of the former student's current income. Thus, such loan systems combined with decreasing real income and vague employment prospects can diminish the equalizing effect.

Having analyzed Japan's experiences in coverage, equal access and reforming of higher education system, we can draw one conclusion that may be of interest to Russia. The optimal design of an education system must achieve a reasonable balance between coverage, cost, and quality. Although the public financing of Japanese universities is being reduced, there is an apparent ambition to preserve, if not enhance, the existing opportunities of university education. This is achieved primarily through expanding and restructuring the private education sector. The state invests mostly in a limited number of public and national universities, while it adopts a laissez-faire policy toward most private institutions. The consumer is allowed to compare education quality and costs and decides whether a specific private university is a viable option, while the state retains the right to disclosing university data for use in numerous rankings, that is, the function of eliminating information asymmetry. The Japanese education market has been developing over the years and has now entered a phase of maturity, with the supply side being represented by hundreds of diverse institutions, consumers with the opportunity to make informed decisions, and competition mechanisms to balance quality and prices. If Russia decides to cut back on public financing and expand private services in higher education, Japan's experience in developing market mechanisms can be of great use.

Full text in English: Belov A., Zolotov A. "Socioeconomic Aspects Affecting University Education in Japan", Educational Studies, HSE, Moscow (coming in 2015).
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