Differences in the Relations between Education and Labor among Societies: Discussion and Analysis Based on “Varieties of Capitalism” Studies

<p> There are considerable differences in the relations between education and labor among societies. General arguments that overlook such differences may lead not only to a mistaken understanding of both education and labor within the society in question, but also to detrimental policies. In order to grasp such differences, this paper reviews the recent evolution of studies on “Varieties of Capitalism (VoC)”, focusing on the issue of skill formation.</p><p> An epochal study on VoC was the book edited by Hall and Soskice (2001), which posited the binary concepts of Coordinated Market Economies (CMEs) and Liberal Market Economies (LMEs). In particular, the chapter titled “Social Protection and Skill Formation” authored by Estevez-Abe et al. attracted wide academic attention because it clearly presented the correspondence between the types of social protections and skill profiles in advanced societies. Japan is characterized by high employment protection, low unemployment protection and the predominance of firm-specific skills. This chapter, however, has some limitations including the overrating of the importance of firm-specific skills.</p><p> Subsequent studies on VoC have developed in two directions: one is the increased sophistication of grouping of societies utilizing various methods of quantitative analysis and the other is inquiries into the origins and turning-points of the characteristic features of one or a few societies through historical investigation. The most recent research trends in VoC are the integration of these two streams on the one hand, and a focus on the viewpoint of partisan politics on the other.</p><p> In the development of these VoC studies, the Japanese characteristics have been drawn as follows. Skill formation in Japan has been characterized by its segmentation within each firm, lacking the state-based vocational education and training (VET) for industry-specific and job-specific skills which have been proved to be conditions for vital economic performance and social equality. Moreover, in recent years, VET within Japanese firms is declining, with a wide gap of opportunity between regular and non-regular workers.</p><p> Based on such an understanding, this paper attempts an empirical analysis to elucidate the features of the relations between education and labor in the Japan of recent years, using the data from the OECD Program for the International Assessment of Adult Competencies (PIAAC). The results imply that Japanese society fails to use its excessively high standard of general skills to bring about either high productivity or social equality. This means that the Japanese model of skill formation, which received high praise in 1970s and 1980s, has already failed to function.</p><p> The conclusion is that Japan should overcome its peculiarities and dysfunctions concerning the relations between education and labor, or the skill formation system. Although VoC Studies offer various suggestions in regard to this problem, a more thorough understanding of actualities in various societies is needed.</p>