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

National and private universities in Japan differ in several ways, but perhaps the most notable distinction is that national universities are generally viewed as providing higher quality of education in comparison to private universities. This view is rooted in the history and the foundations under which national universities were founded in Japan an institution to educate the nation's elite and a recruiting ground for government ministries.Do such national-private sector distinctions impact the occupational outcomes of Japanese university graduates? If so, in what ways? Using a 1995 cross-sectional survey of Japanese workers, this paper examines in detail, the employment distribution and the rate of return to Japanese university graduates with respect to national-private sector differences. In order to examine quality differences between and among national and private universities, I construct the quality variable proxied by the mean scores of the entrance examinations of the universities attended by the survey respondents.My main findings show that: (i) Earnings are an increasing function of university quality; (ii) On average, the quality of national universities are higher; (iii) National university graduates are more likely to be employed in the government sector; and (iv) Because of (i) and (ii) coupled by the lower tuition, national university graduates have a higher internal rate of return (IRR) to their education. My findings lend support to the 'elite' perspective proposed by Becker (1993), under which higher ability individuals (in this case national university graduates) have more to gain from university education than lower ability individuals.