Education and Economy in Japan: Overeducation, Anxiety, Unhappiness and Low Productivity

Abstract: The thesis reviews research about economic impact of education and overeducation, and also researches about education, inequality and suicide in Japan. The thesis describes Thurow’s job competition model, Spence’s job market signaling model and Tsang and Levin’s production model. By using descriptive quantitative methods, it shows that Japan has overeducation problem brought by mismatch between education and employment. Extremely difficult university entry exams, sense of competition and class stratification create the mismatch of education is usually created when students chase after higher education regardless of what companies really require, and employers also use an inappropriate single standard to search for new employees. Overeducation and mismatch are mainly due to institutional and cultural reasons and some reforms are discussed as feasible solutions.