{"title":"Japan's Aging Workforce: Determinants and Outlook","authors":"Sagiri Kitao, Nozomi Takeda","doi":"10.1111/aepr.12506","DOIUrl":null,"url":null,"abstract":"<div>\n \n <p>This paper examines recent trends in the Japanese labor market, with a particular focus on the elderly workforce. Japan's elderly employment rates are notably high compared to other OECD countries and have increased significantly over the past two decades. To investigate the factors that affect the employment of old individuals, we develop a structural life-cycle model with consumption-saving decisions and endogenous labor supply in both intensive and extensive margins. The model is calibrated to the cohort of men born in 1936–1940. We find that social security reforms to raise the retirement age by 5 years and reduce the replacement rate by 20% would have increased labor force participation among men in their 60s from 58% to 69% and 67%, respectively, while also encouraging greater retirement savings. Furthermore, we find that overall labor productivity growth reduces elderly participation due to an income effect, whereas productivity growth among the elderly, driven by lower skill depreciation, motivates longer labor force participation.</p>\n </div>","PeriodicalId":45430,"journal":{"name":"Asian Economic Policy Review","volume":"20 2","pages":"251-260"},"PeriodicalIF":7.0000,"publicationDate":"2025-02-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Asian Economic Policy Review","FirstCategoryId":"96","ListUrlMain":"https://onlinelibrary.wiley.com/doi/10.1111/aepr.12506","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This paper examines recent trends in the Japanese labor market, with a particular focus on the elderly workforce. Japan's elderly employment rates are notably high compared to other OECD countries and have increased significantly over the past two decades. To investigate the factors that affect the employment of old individuals, we develop a structural life-cycle model with consumption-saving decisions and endogenous labor supply in both intensive and extensive margins. The model is calibrated to the cohort of men born in 1936–1940. We find that social security reforms to raise the retirement age by 5 years and reduce the replacement rate by 20% would have increased labor force participation among men in their 60s from 58% to 69% and 67%, respectively, while also encouraging greater retirement savings. Furthermore, we find that overall labor productivity growth reduces elderly participation due to an income effect, whereas productivity growth among the elderly, driven by lower skill depreciation, motivates longer labor force participation.
期刊介绍：
The goal of the Asian Economic Policy Review is to become an intellectual voice on the current issues of international economics and economic policy, based on comprehensive and in-depth analyses, with a primary focus on Asia. Emphasis is placed on identifying key issues at the time - spanning international trade, international finance, the environment, energy, the integration of regional economies and other issues - in order to furnish ideas and proposals to contribute positively to the policy debate in the region.
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