japanese children walking school Martin Bureau/AFP/Getty Images

Pro-Growth Education for Japan

It is time for Japan to unleash the third "arrow" of Abenomics: a long-term growth strategy underpinned by structural reforms. A critical element of that strategy must be improved human-capital formation, achieved through a revised approach to education.

TOKYO – 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% 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% – in jobs such as clerical work, where automation is replacing workers and suppressing wages.

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