Japan lays groundwork for free education policy to help economy

TOKYO (Reuters) - Japan is laying the groundwork for a free education program for some households that will cover a student's costs from pre-school to college to ensure the country maintains a highly-skilled workforce.

The program, still in its early stages, is expected to feature in the government's economic strategy due sometime around June, which is part of Prime Minister Shinzo Abe's economic agenda, commonly called "Abenomics."

The government invited Joseph Stiglitz, an economist and a Nobel laureate, to speak at its top advisory panel on Tuesday about investing more in education by introducing universal access to a college education.

A ruling Liberal Democratic Party panel is also debating the scope of the plan and how to fund it, with an eye on helping low-income families.

"Stiglitz has many ideas that agree with some of the things that we are trying to do in the second stage of 'Abenomics,'" Abe said after the panel met.

Stiglitz also recommended that Japan raise salaries for workers in education and healthcare to draw more workers into the services sector, raise minimum wages, raise public-sector wages and increase productivity.

These are all policies that Abe has adopted recently, but some economists say the pace of improvement in wages has been too slow.

"I talked about some of the underlying reasons for the slowdown in growth and productivity and the dangers of what happens if these issues that are dividing societies are not addressed," Stiglitz told reporters.

Stiglitz also said that monetary policy in Japan has reached its limits, so it is better to support growth by narrowing the wealth divide and increasing productivity.

Abe shifted his economic agenda last year to focus on raising the minimum wage, curbing long working hours and improving access to child care.

At the time, Abe framed the shift as a focus on the redistribution of wealth. Economists have largely welcomed this shift, but some critics say policies are not bold enough.

Abe is trying to breathe new life into his economic agenda after the growth spurt caused by his mix of fiscal spending and monetary easing from the central bank started to fade.

(Reporting by Stanley White; Editing by Jacqueline Wong)

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