Foreign students ‘crucial’ to Japan amid high graduate employment

Japan’s record graduate employment rate highlights the need for more support for international students to stay and work in the country as businesses increasingly compete for a shrinking pool of skilled workers, according to academics. 

New figures from the country’s Ministry of Health, Labour and Welfare show that, of those seeking jobs, 98 per cent of 2025-26 university leavers were employed on 1 April, having graduated in March. 

The graduate employment rate was unchanged from last year – the highest level since records began in 1997. 

Although the figures partially reflect an ongoing practice of cohort-based hiring, which means Japanese firms recruit graduates with the expectation they will remain at the company long-term, they also highlight “a deeper structural issue linked to demographic decline”, according to Futao Huang, professor at Hiroshima University’s Research Institute for Higher Education. 

“Japan’s shrinking youth population means that employers are competing for a steadily smaller pool of university graduates,” he said. “In this sense, the exceptionally high graduate employment rate partly reflects the opposite problem from that faced in many Western countries: rather than graduate oversupply, Japan is increasingly confronting a shortage of highly educated young workers.”

It comes as new data highlight the scale of the country’s demographic challenges. Preliminary government census figures released on 29 May show that Japan’s population has fallen by 3 million people over the past five years, the largest ever decline over an equivalent period.

To cope, the country might need to speed up its internationalisation efforts, academics said. 

Akiyoshi Yonezawa, professor in the Institute of Liberal Arts and Sciences at Tohoku University, noted that although more universities are offering English-taught programmes, uptake is mixed and “Japanese firms still tend to require Japanese language proficiency among jobseekers, including undergraduate and postgraduate university graduates”. 

“The shortage of new graduates in Japan’s higher education system requires the removal or decrease of language barriers in both higher education and the labour market,” he said. 

Huang said he expected international students “to play an increasingly important role in Japan’s graduate labour market” in future. 

“The government and universities now see international students not only as temporary learners but also as potential long-term skilled workers who can support economic sustainability, research capacity and internationalisation,” he continued.

Japan has successfully expanded its efforts to attract international students in recent years, hitting its goal of 400,000 students in 2025 – eight years ahead of the government’s target date. 

But Huang said Japan still “faces major challenges in retaining international graduates after completion of study, including language barriers, workplace integration, career progression opportunities and immigration pathways”. 

Unlike some popular international student destinations in the West, Japan does not offer a universal post-study work visa. 

After graduation, international students are generally permitted to remain in Japan for up to one year while job-hunting, during which time they are allowed to engage in part-time work.

If they receive a job offer, their work visa to allow them to remain in the country must be sponsored by their new employer.  

“On the positive side, graduates in Japan continue to benefit from relatively stable employment opportunities compared with peers in many other advanced economies,” Huang added.

helen.packer@timeshighereducation.com