Training the Nation’s Elite: National-Private Sector Differences in Japanese University Education

Abstract

I examine the relationship between university prestige and socioeconomic achievement in Japan. I generate a set of hypotheses based on human capital and screening models of education, and test these using a 1995 cross-sectional dataset. I find that university prestige significantly improves socioeconomic achievement among male university graduates in Japan. I also find that national university graduates have higher rates of return to their university education, and are more likely to be employed in higher prestige occupations than are private university graduates. My findings lend support to the ‘elite’ view of investments in human capital proposed by Becker (1993), under which higher ability individuals (in this case national university graduates) have more to gain from university education than do lower ability individuals. I find little support for the screening model of education.

Keywords: supply and demand for human capital, cost–benefit analysis, national–private sector differences, university quality

JEL Classification: I28, J24, J31, N35