After World War II, enrollment in the Japanese educational system underwent an unprecedented expansion, largely on account of postwar economic growth. Although such expansion was common throughout the world, Japan's experience was unique because of the magnitude of changes in the enrollment rates and the degree to which these changes directly reflect popular demand rather than government intervention. Accordingly, this study is a systematic quantitative analysis relating the increased demand for education in Japan to economic variables. The study addresses three questions: (1) What caused the educational expansion? (2) How did it keep momentum for such a long period? and (3) Why did it finally lose momentum in the mid-1970s? After an introduction establishing the framework and issues of analysis, the first chapter sets forth a theoretical framework by creating a model of individual choice from which the aggregate demand function of education can be derived. Chapter II examines internal rates of return of senior high school and college education from 1954 to 1980, and analyzes changes in the benefit-cost ratio over this period. Then alternative indicators of anticipated educational benefits are constructed, based on hypothetical models of rational expectation. Based on this analysis, chapter III presents the methods and results of a time-series regression analysis that discloses determining factors of the actual changes in enrollment rates. The original sources and methods of estimation of the data used in the text are appended: (1) the estimation of cohort enrollment rates; (2) the wage-profile by education; (3) the direct costs of senior high school and college education; and (4) the time-series economic indicators. The last two appendices examine the difference between the United States and Japan and the gender differentials in economic returns to education. (TE)