Situations and Challenges of Rate of Return to Schooling Studies:
In this paper, I will show the purpose (Section 1) and structure (Section 2) of this paper.And I will briefly introduce the human capital theory and signaling theory (Section 3).Then, I will overview the developments of rate of return to schooling studies done by researchers of foreign countries, especially in the United States and the United Kingdom (Section 4). Next I will summarize the rate of return to schooling studies done by Japanese researchers (Section 5). Finally I will compare both of them and clarify the significance and future challenges of such studies by Japanese researchers (Section 6).
Section 4 demonstrates that rate of return studies by foreign researchers were especially focused on the net rate of return to schooling with ability data, twin data and IV estimates, excluding the ability and selection biases. Section 5 explains that Japanese researchers focused on the very detailed economic structure of academic credentialism, while paying insufficient attention to net rate of return to schooling. They also calculated very sophisticated estimates of rate of return to schooling by sizes and industries of companies, or to individual universities or schools.
I conclude that the above sophisticated estimates of rate of return by Japanese researchers are unique and calculated based on the social concern on “ Examination Hell”. Future challenges must devote more attentions to ability biases, and also focus on the detailed economic structure of academic credentialism.