Pro-growth education for Japan

by Koichi Hamada

Since Prime Minister Shinzo Abe initiated his Abenomics reform program in 2012, Japan’s economy has received a remarkable boost. But the job is not yet finished.

I once argued that the three “arrows” of Abenomics — monetary easing, fiscal expansion and a long-term growth strategy — should be given grades of A, B and E, respectively.

Monetary easing gets an A even though, as critics love to point out, the 2 percent inflation target is far from being achieved. The reason is that the inflation target is only a means to an end: full employment. Here, Japan has been tremendously successful, creating more than 2.7 million jobs since the first arrow of Abenomics was launched. The job vacancy-to-applicant ratio now stands above parity, though it does remain low — even below 50 percent — in jobs such as clerical work, where automation is replacing workers and suppressing wages.

Fiscal policy gets a B, because — along with monetary expansion — it has shifted the economy from excess supply to excess demand. It is only on the third arrow, a long-term growth strategy underpinned by structural reforms, that Abenomics has performed insufficiently, because so much work remains to be done. And the current excess-demand situation makes that work all the more urgent.

A critical element of an effective long-term growth strategy will be to address the barrier to growth posed by Japan’s rapidly aging and shrinking population. That means ensuring not only that the country’s young people have jobs, but also that they are educated and productive enough to carry the weight of the economy on their shoulders. To that end, Japan needs to invest more in education.

This proposition is not unheard of in Japan. On the contrary, the Abe government currently places a high priority on preschool education — an approach supported by research conducted by the Nobel laureate economist James Heckman, who has found that investment in preschool education brings large returns.

But there is one aspect of Heckman’s work that Japan may fail to embrace. According to Heckman (writing with co-authors Jora Stixrud and Sergio Urzua), non-cognitive skills such as cooperation are just as important as cognitive skills like reading or math to improve labor market productivity, because they enhance the capacity to take initiative and assert effective leadership.

Yet Japanese schools continue to emphasize rote learning, with students memorizing facts and formulas rather than practicing critical thinking, problem solving and conflict resolution. This undermines innovation and productivity in the best of times. But it is all the more harmful at a moment when automation is taking over a growing number of roles.

As part of a new long-term growth strategy, Japan must rethink its approach to education. For some clues as to how that can be done, it is worth examining the ideas of the composer Zoltan Kodaly, whose widow I met on a recent trip to Hungary, where I was invited not just as an economist but also as an aspiring musician. (After my lecture at the central bank, my own composition echoed in the lecture hall.)

The Kodaly method of music education does not simply teach a child which motions it takes to read or play a song. Instead, it allows children from a very young age to develop a relationship with the music by, say, singing or moving to it. And even that process is not rigid: For example, his method encourages group singing without adherence to particular written notes, in order to foster interactions within the group.

The Kodaly method bears some similarities to the Suzuki method, created by the Japanese violinist Shinichi Suzuki, whose curriculum emulates the process of natural language acquisition. In both cases, the way children actually think and develop musical sense — rather than rigid rules and structures — guides the learning process.

In Japan, where cognitive, academic scores are overly emphasized above holistic human development, this style of engagement with the arts, including music, can foster not only an appreciation of beauty but also imagination, cooperation, initiative, leadership, empathy and compassion. And the child-development approach to learning can be applied to other subjects as well, enabling children to spend more time engaging with the material and one another.

An effective long-term growth strategy — in Japan and elsewhere — must recognize that no human can out-memorize a machine. Instead, such a strategy must make the most of what humans, and only humans, do best.

Koichi Hamada is a professor emeritus at Yale University and a special adviser to Prime Minister Shinzo Abe. © Project Syndicate, 2018 www.project-syndicate.org