The graying of Japan.

Abstract

Japan's rapidly aging population has become a top policy issue, especially as the increasing costs of pensions and medical care are debated. With the highest life expectancy on earth, the Japanese potentially face long periods of retirement, as well as the possibility of long periods of disability. Although family support of the elderly is thought to have been strong traditionally, the recent decline in co-residence with children is 1 indication that the way support is given may be changing. This issue is of particular concern to the government, which wants to avoid any greater responsibility for the elderly than is necessary given the dramatic population aging yet to come. The government is also encouraging employers to provide more employment opportunities for the elderly at the same time that it is trying to raise the eligibility age for the receipt of public pensions. There is resistance on the part of employers, however, because wages and retirement allowances in Japan are positively related to length of employment. Furthermore, it is not clear whether elderly Japanese of the future will be as willing to work, if they learn to enjoy increased leisure early in their careers. Nevertheless, it is unlikely that population aging will lead to Japan's economic decline. Although the savings rate may decline somewhat, restructuring of the economy and continued overseas investment should keep the economy growing in the long run. Important in both the care of the frail elderly and the continued growth of the economy will be the roles played by middle-aged Japanese women.