Higher education and employment

The flow of Japanese students from the educational system into the employment system is discussed with particular reference to higher education. The author shows that in the Japanese case cultural processes have to be considered as well as those deriving from purely economic models. Life-time (or at any rate long term) employment and the prevalence of a single annual recruitment are examples of how the employment system influences educational choices. The relationships between economic trends and graduate employment opportunities are discussed, highlighting the impact of university expansion, the trend towards equalization of earnings, the marked increase in female participation, changing patterns of movement towards and away from city locations and the diversification of industry into new fields such as information science. Detailed examination of the transition from the educational to the employment system confirms the importance of cultural factors. Since major corporations tend to recruit from the more prestigious universities and since starting salaries do not vary greatly employment competition is focussed more upon the company than the actual job undertaken. Pay differentials between individuals do not emerge till employees are into their 30's. This approach implies a company-oriented theory of human capital which is in contrast with the more individualistic theories typical of Western countries. However, changes in Japanese cultural attitudes, developments in the way in which modem industry is structured and the drive towards internationalization, all point towards the adoption of a more individualistic theory of human capital.