Spotlight: economic and social effects of ageing population in Japan


Japan's population fell by 31,000 in the first six months of this year, raising the prospect that the number of people would start shrinking two years earlier than expected. This selection of OECD documents and publications will help you better understand the problem that a declining population may pose for Japan's pension system, tax base, labour market or sustainability of the social security system.

Essential reading:

Pensions: how does Japan compare with other OECD countries ?   
Presentation in Tokyo by Edward R. Whitehouse, OECD directorate for Employment, Labour and Social affairs. How does Japan compare with other OECD countries: (i) in terms of the pension promise; (ii) in terms of older people’s incomes relative to average household incomes; and (iii) in terms of current and projected future public spending on old-age pensions.

Economic Survey of Japan 2005: Key economic challenges facing Japan
This chapter discusses the key challenges facing the Japanese economy. Although the current expansion is encouraging, Japan must successfully address a number of challenges in order to sustain a robust expansion and ensure rising living standards in the face of rapid population ageing.

Economic Survey of Japan 2005: Achieving fiscal sustainability
This chapter of the OECD Economic Survey of Japan 2005 discusses the deterioration in the fiscal situation and measures needed to restore fiscal sustainability in the light of future pressures for increased spending, notably from rising interest payments and the social security system.

In Japan, there is life-time employment but the vast majority of companies have a policy of mandatory retirement at the age 60. Japan has put in place measures to remove barriers for older people, but more needs to be done to mobilise their potential labour supply in the face of population ageing.

Further reading:

The impact of ageing on demand, factor markets and growth   
How ageing could affect growth? What impacts on the level and the allocation of savings, capital accumulation, labour supply and the structure of consumption? Economics Department Working Paper 420 by Joaquim Oliveira Martins, Frédéric Gonand, Pablo Antolin, Christine de la Maisonneuve and Kwang-Yeol Yoo.

Policy Brief : Solving the Pensions Puzzle 
This policy brief presents a comparison of public pension policies in OECD countries. It shows levels of pension benefits that today's workers will be entitled to in the future. For the first time, replacement rates are calculated both gross and net of taxes. 

Policy Brief : Ensuring quality long-term care for older people 
Demand for long-term care for older people is set to rise steeply in OECD countries as the baby-boom generation reaches old age. But can they be sure of receiving quality care at a price they can afford? 

Ageing Populations: High Time for Action --background paper prepared by the OECD for the meeting of G8 Employment and Labour Ministers, London 10-11-March, 2005  
Over the past decade, there has been heated debate on the socio-economic consequences of population ageing. The trends are clear. People are living longer and longevity will continue to improve in coming decades, while fertility has declined and is likely to remain below reproduction rates in the predictable future. As a result, the number of elderly people will rise significantly relatively to the number of people of working age.

Ageing Societies and the Looming Pension Crisis   
The challenge of ageing populations has countries seeking new ways to finance retirement plans. OECD research suggests implementing a range of reforms, from changing workplace practices and labor policies to altering state pension plans and encouraging older workers to delay retirement. This document presents a selection of key OECD reports on this important issue.

Coping with ageing: a dynamic approach to quantify the impact of alternative policy options on future labour supply in OECD countries 
Jean-Marc Burniaux, Romain Duval and Florence Jaumotte
Economics Department Working Paper 371. In the face of the substantial ageing of population expected to occur in OECD countries over coming decades, policies that boost labour-force participation attract considerable interest.

The retirement effects of old-age pension systems and other social transfer programmes in OECD countries 
Economics Department Working Papers 370 by Romain Duval. This paper examines the impact of old-age pension systems and other social transfer programmes on the retirement decision of older males in OECD countries.  

Policies for an ageing society: recent measures and areas for further reform 
Bernard Casey, Howard Oxley, Edward Whitehouse, Pablo Antolin, Romain Duval and Willi Leibfritz Economics Department Working Paper 369. This paper provides a synthesis of age-related developments and policies for a range of OECD countries, drawing on recent OECD work. 

Related Internet sites:

17-18 October 2005
The aim of this ministerial meeting, to be held in Brussels, is to present and discuss the Synthesis Report which summarises the main lessons and issues that have emerged from the thematic review on Ageing and Employment Policies prepared for twenty-one OECD countries.
More on ageing society:
More on insurance & pensions:


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