About Human Capital Program

Program Director

TSURU Kotaro's photo

TSURU Kotaro(Program Director and Faculty Fellow)

Starting in the Third Medium-Term Plan, RIETI set up new programs under major areas of research. Research concerning employment/labor/education has been conducted under the Human Capital program. The reason the themes of employment, labor, and education are grouped under the term "Human Capital" is that the utilization of human resources will be of critical importance for Japan to overcome the constraints of its declining population and lack of resources, as well as drive its growth potential while leveraging its advantages.

The program has produced a range of research outputs in the employment/labor/education areas. The outputs of the Third Medium-Term Plan are summarized in Tsuru, Kotaro (2015), "Toward reforms in employment system and human resource education" and Fujita, Masahisa (Ed.) (2016), "Sustainable growth of Japanese economy: Evidence-based policy recommendations." Many of the outcomes under the Fourth Medium-Term Plan are compiled in Tsuru, Kotaro (Ed.) (2019), "Toward the reconstruction of the employment system: How to change the way we work in Japan?"

Under the Fifth Medium-Term Plan, we will examine the following three major themes. The first theme is "Employment/education reform in the age of AI." Under the Fourth Medium-Term Plan, we reevaluated the Japanese-style employment system model and provided comprehensive perspectives and policy recommendations regarding the nature of the reconstruction of the Japanese-style employment system that combines reform for permanent and non-permanent employees. Coinciding with the Fourth Medium-Term Plan, the Work Style Reform made significant progress via large-scale reforms that were led by the government including legislative amendments, accomplishing the top-priority issues concerning permanent and non-permanent employees, which were the correction of long working hours and improvement of compensation, respectively.

It is expected that the advancement in new technologies, including ICT and AI, and data economies will rapidly restructure society and the economy over the next 10 years. To continue to facilitate the work style reform in the future and realize concrete outcomes, a new employment system and labor market must be designed using the work style reform and new technology as two primary principles so that both corporate performance and the well-being of employees can be enhanced. We will provide empirical analysis and policy recommendations from these perspectives. We will also focus on understanding the status of individual contractors and freelancers—new forms of employment that emerged with the development of the gig economy—and the nature of labor protection.

In addition, necessary human capital must be identified, i.e., the capacity and skills required during the age of AI to adapt to the major changes in the environment. Thus, the program will comprehensively examine what the effects might be of the efforts by and experiences of people of all ages, including their education before entering the workforce and training received after entering the workforce, on their cognitive/non-cognitive ability/skills and other abilities/skills and their outcomes on people's lives (e.g., educational attainment, professional performance, and health condition), and make recommendations on the required reforms in education/training.

The second theme is "Improving the well-being of workers." To enable the work style reform to improve the performance of companies, employees must work in physically and mentally healthy and fulfilling ways. The awareness of this is growing. Thus, this program will focus on the well-being of employees, including their mental health, efforts by companies regarding health management, and the causal relationship between these aspects and corporate performance, to offer empirical analysis and recommendations.

The third theme is "Using new datasets in the age of AI." To ensure that significant policy implications can be obtained from our analysis, the Human Capital program has produced a range of research outputs via the use of raw data from government statistics as well as original datasets, such as the ones from our originally designed web surveys and internal operational data from companies, such as human resources data. The program under the Fifth Medium-Term Plan will continue to promote this type of research that uses such datasets and will examine the possibility and feasibility of conducting studies that are suitable for the age of AI, including those that use Big Data.

The projects under this program will be oriented toward interdisciplinary research. These projects, as part of the Human Capital program, will be undertaken so that information can be shared and collaboration with other projects can be undertaken to construct a cohesive program that can produce synergies.