Abstract
Population in Japan has been declining even faster than other developed countries in the world. Among other policy goals, this requires the reconstruction of the financial system of public education. Reduction in both class and school is inevitable, so it is necessary to adjust to a new situation for maintaining the public educational system. This paper discusses a sustainable finance system for public education in population decline. First of all, class size and school size until 2035 is estimated based on population forecast data of each municipal district, city, town and village (National Institute of Population and Social Security Research). Next, several policy designs, ideas that will ease sudden changes are assumed, and the government fiscal expenditure needed are respectively estimated. As a result, it was confirmed again that the downsizing of public schools and classes are remarkably advanced and also that government fiscal expenditure for public education has been and will be sharply reduced, especially in the rural municipal districts, unless there is some adjustment. In addition, it was clarified that the trajectory of lower class size will not have much influence on the total amount of government fiscal expenditure for public education. That is why the influence of a decrease of the number of school-aged children is relatively larger than the change of lower class sizes for the near future. Additionally, the per-head formula for public schools relatively tends to reduce the amount of government fiscal expenditures to the public education beyond that of a per-class formula. From these findings, this paper proposes three ideas for designing a sustainable public educational finance system that absorbs the risk of population change. First, we propose to introduce an aid formula for a sparsity factor which will allocate funds to school with large districts but a sparse attachment area in addition to the current per-class formula. Such a system will ease the severe mutation of government fiscal aid for public school to some degree. Second, the educational expense standard per school or per student have to be calculated. This standard will make it possible to prevent educational expenditure cutbacks in the decreasing phase of the school-aged population. Finally, it is necessary to achieve social consensus for expenditures, not only for senior citizens but also for school-aged children.
