Developing Character Skills in an Era of the 100-Year Life

TSURU Kotaro
Faculty Fellow, RIETI

The "100-year life" has become a buzzword. This term has started to attract attention because of The 100-Year Life: Living and Working in an Age of Longevity, a book written by Lynda Gratton, a professor and director at the London Business School, and her colleague. The Shinzo Abe administration has established the Council for Designing 100-Year Life Society, whose members include Professor Gratton, and is now conducting a study on a "human resource development revolution," which is a new key phrase of the Abe administration's reform initiative.

In an era of the 100-year life, people may be expected to work until the age of 80. Given the rapid speed of recent technological innovations, what we must learn is dramatically changing. It is important to continue learning regardless of age, and it is also essential to find opportunities to devote earnest efforts to re-learning. That is why recurrent education (which refers to the practice of receiving education and working alternately over one's lifetime) has become an important policy challenge.

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However, specifically, what should we re-learn? Should we acquire new knowledge provided unilaterally by teachers in classrooms? Jobs that merely require the accumulation and application of knowledge are likely to be taken over by artificial intelligence (AI). What are the fundamental capabilities and skills that cannot be replaced by AI?

The key is "character skills." Character skills are known as non-cognitive skills in the fields of psychology and economics. I mentioned character skills in this column on January 20, 2014 and also discussed those skills comprehensively in my forthcoming book Seikaku Sukiru wo Kimeru Itsutsu no Noryoku (Five Capabilities that Determine Character Skills).

In the field of psychology, the consensus is that personality can be divided into five major factors (Big Five). A person's personality is presumed to represent a combination of these factors. The five factors are "openness" (curiosity and aesthetic sensitivity), "conscientiousness" (perseverance to strive toward goals with discipline), "extroversion" (sociability and outgoingness), "agreeableness" (sympathy and kindness), and "emotional stability" (a lack of nervousness and impulsiveness).

In particular, conscientiousness is known to have a significant impact on vocational life. For example, Texas A&M University Professor Murray Barrick et al. summarized many past studies overseas concerning the correlation between job performance and the Big Five factors. According to the results of their analysis, conscientiousness was found to have the greatest correlation with job performance with an average correlation coefficient of 0.22, followed by extroversion with 0.13, emotional stability with 0.08, agreeableness with 0.07, and openness with 0.04.

As for studies implemented in Japan, we analyzed data from an online survey conducted by the Research Institute of Economy, Trade and Industry. Using "no tardiness in their high school days" as a proxy variable, we showed that people high in conscientiousness tend to perform better in education and be employed as regular workers in their first and current jobs. Meanwhile, Osaka University Professor Fumio Ohtake et al., in a study conducted by his university, found that in the case of men, conscientiousness has a positive correlation with the annual income level in Japan and the United States.

Along with conscientiousness, self-reliance and self-esteem, which are aspects of emotional stability, are also character skills that have a significant impact on vocational life. Some studies show that people possessing self-reliance and self-esteem before starting their working life tend to earn higher wages in their later years. For example, University of Chicago Professor James Heckman et al. found that the higher a person's level of character skills consisting of self-reliance and self-esteem are in adolescence, the higher his/her wage level will be in adulthood.

The same study also shows that there is not much correlation between the intensity of the impact of a person's level of character skills on wages and his/her academic achievement. In other words, a higher level of character skills leads to higher wages regardless of academic achievement.

What is also interesting is the impact of agreeableness on vocational life. According to the aforementioned study conducted by Professor Ohtake et al., in Japan, the higher the degree of agreeableness, the higher the annual income level is in the case of men, while in the United States, the higher the degree of agreeableness is, the lower the annual income level is in the case of both men and women. Another study also found a negative correlation between agreeableness and wages in the United States, albeit only in the case of men. This difference between Japan and the United States may be considered to be a reflection of differences in the workplace atmosphere: whereas collectivism is strong in the Japanese workplace, individualism prevails in the American workplace.

When should character skills, which may significantly impact vocational life, be developed? It is well known that the Perry Preschool Project, which was implemented in the United States in the 1960s for preschool children in problematic family environments, positively impacted those children's subsequent lives by developing their character skills in the preschool period. Evidence like this appears to be reflected in the Abe administration's education policy that features the introduction of free pre-school education.

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However, we must not forget that character skills can also be developed at later stages of the life cycle. University of Illinois at Urbana-Champaign Professor Brent Roberts et al. examined how each of the Big Five factors changes with age based on a comprehensive analysis of past studies (in this analysis, extroversion was divided into two traits: social dominance (strong self-assertiveness) and social vitality (gregariousness)) (See the Figure below).

Figure: Some Character Skills can be Developed in Adulthood
Figure: Some Character Skills can be Developed in Adulthood
Note: Prepared by the author based on the study conducted by University of Illinois at Urbana-Champaign Professor Brent Roberts et al. (2006). The vertical axis represents the sum of indexed differences by age group.

This figure shows that social dominance, conscientiousness, emotional stability, and agreeableness continue to grow throughout the life cycle. On the other hand, although social vitality and openness grow in the teenage period, they decline in later stages of the life cycle. It is noteworthy that conscientiousness, emotional stability, and agreeableness, all of which have a particularly significant impact on the success or failure of people's lives, have larger room for growth when they are in their 20s and 30s than in their teenage years.

This is clear evidence that character skills may well be developed in adulthood. In the new era of the 100-year life, if people can continue to develop character skills, they can create a future for themselves in whatever course of life they may take.

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How can people develop their character skills after starting working life? In fact, a mechanism to foster character skills is inherent in the Japanese-style employment system.

Let us look at the effects of job transfers, for example. As a result of job transfers, employees are assigned to positions requiring more difficult job skills or stronger leadership in many cases. They must acquire the necessary vocational capabilities and have the conscientiousness to patiently try to adapt to a new working environment and overcome new challenges. Making such efforts, in turn, fosters conscientiousness. As a job transfer makes it necessary to build relationships with unfamiliar people, agreeableness and extroversion are also important.

However, the centerpiece of the government's initiative to promote working style reform is an overhaul of the Japanese employment system that depends on the workforce of regular employees who are willing to accept job transfers and work without limits to the scope of job duties, workplace location, and working hours. This change is a trend that suits the needs of the times. How can companies develop employees' character skills without relying on job transfers? Companies' personnel management divisions are facing a serious challenge. It is also essential that university education and recurrent education incorporate the perspective of enhancing character skills.

>> Original text in Japanese

* Translated by RIETI.

January 15, 2018 Nihon Keizai Shimbun

February 27, 2018