Japan’s Pension Reforms: Assessing Challenges, Sustainability and Policy Response

Japan’s aging population and declining birth rate presents increasing financial strain on its public pension system. Cultural values such as filial piety (oyakoko) and lifelong employment traditions have historically shaped Japan’s pension system but now present challenges as modernization shifts elder care responsibilities from families to the state. This paper examines how demographic shifts affect social welfare and assesses policy measures to ensure long-term financial stability. Taking a qualitative interpretivist approach, secondary data was collected and analyzed using Braun and Clarke’s thematic framework. Findings highlight low worker contributions, high dependency ratios, and a growing imbalance between inflows and outflows in the pension system. To address these challenges, proposed reforms include investing in stocks, raising the retirement age, and implementing structured savings plans. Lessons from Sweden and Germany suggest that adapting international models to Japan’s unique demographic and cultural context is essential.