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Social Security Reforms and Labor Force Participation of the Elderly in Japan

Author

Listed:
  • Oshio, Takashi
  • 小塩, 隆士
  • オシオ, タカシ
  • Sato Oishi, Akiko
  • 大石, 亜希子
  • オオイシ, アキコ
  • Shimizutani, Satoshi
  • 清水谷, 諭

Abstract

We examine how social security programs have affected the labor force participation (LFP) of the elderly over the past forty years in Japan. Using publicly available data, we construct forwardlooking incentive measures for inducing retirement, to ascertain the actual changes in the generosity of the programs and to explore the impact of the reforms on the labor supply of the elderly. Our regression analysis shows that the LFP of the elderly is significantly sensitive to the measures, and our counter-historical simulations show that since 1985, social security reforms have significantly encouraged the elderly to remain longer in the labor force.

Suggested Citation

  • Oshio, Takashi & 小塩, 隆士 & オシオ, タカシ & Sato Oishi, Akiko & 大石, 亜希子 & オオイシ, アキコ & Shimizutani, Satoshi & 清水谷, 諭, 2008. "Social Security Reforms and Labor Force Participation of the Elderly in Japan," PIE/CIS Discussion Paper 407, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:piecis:407
    Note: This paper was motivated by the International Social Security Project of the National Bureau of Economic Research (NBER) in which the authors participated.
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    Cited by:

    1. Shimizutani, Satoshi & 清水谷, 諭 & シミズタニ, サトシ & Oshio, Takashi & 小塩, 隆士 & オシオ, タカシ, 2009. "New Evidence on Initial Transition from Career Job to Retirement in Japan," PIE/CIS Discussion Paper 430, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    2. Shimizutani, Satoshi, 2011. "A new anatomy of the retirement process in Japan," Japan and the World Economy, Elsevier, vol. 23(3), pages 141-152.
    3. Shimizutani, Satoshi & 清水谷, 諭 & Fujii, Mayu & 藤井, 麻由 & Oshio, Takashi & 小塩, 隆士, 2012. "Option Value of Work, Health Status, and Retirement Decisions: New Evidence from the Japanese Study on Aging and Retirement (JSTAR)," CIS Discussion paper series 566, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    4. Hiroyuki Motegi & Yoshinori Nishimura & Kazuyuki Terada, 2016. "Does Retirement Change Lifestyle Habits?," The Japanese Economic Review, Japanese Economic Association, vol. 67(2), pages 169-191, June.
    5. Tsunao Okumura & Emiko Usui, 2014. "The effect of pension reform on pension-benefit expectations and savings decisions in Japan," Applied Economics, Taylor & Francis Journals, vol. 46(14), pages 1677-1691, May.
    6. Takashi Oshio & Akiko S. Oishi & Satoshi Shimizutani, 2018. "Social Security Programs and Elderly Employment in Japan," NBER Chapters, in: Social Security Programs and Retirement around the World: Reforms and Retirement Incentives, pages 271-296, National Bureau of Economic Research, Inc.
    7. Benxi Lin & Zongjian Lin & Yu Yvette Zhang & Weiping Liu, 2018. "The Impact of the New Rural Pension Scheme on Retirement Sustainability in China: Evidence of Regional Differences in Formal and Informal Labor Supply," Sustainability, MDPI, vol. 10(12), pages 1-7, November.
    8. Satoshi Shimizutani & Takashi Oshio & Mayu Fujii, 2014. "Option Value of Work, Health Status, and Retirement Decisions in Japan: Evidence from the Japanese Study on Aging and Retirement (JSTAR)," NBER Chapters, in: Social Security Programs and Retirement Around the World: Disability Insurance Programs and Retirement, pages 497-535, National Bureau of Economic Research, Inc.
    9. ICHIMURA Hidehiko & SHIMIZUTANI Satoshi, 2011. "Retirement Process in Japan: New evidence from Japanese Study on Aging and Retirement (JSTAR)," Discussion papers 11080, Research Institute of Economy, Trade and Industry (RIETI).
    10. Emiko Usui & Satoshi Shimizutani & Takashi Oshio, 2016. "Are Japanese Men of Pensionable Age Underemployed or Overemployed?," The Japanese Economic Review, Springer, vol. 67(2), pages 150-168, June.
    11. Emiko Usui & Satoshi Shimizutani & Takashi Oshio, 2017. "Health Capacity to Work at Older Ages: Evidence from Japan," NBER Chapters, in: Social Security Programs and Retirement around the World: The Capacity to Work at Older Ages, pages 219-241, National Bureau of Economic Research, Inc.
    12. Satoshi Shimizutani & Takashi Oshio, 2016. "Public Pension Benefits Claiming Behaviour: new Evidence from the Japanese Study on Ageing and Retirement," The Japanese Economic Review, Springer, vol. 67(3), pages 235-256, September.
    13. Heller, Peter S., 2016. "The challenge of an aged and shrinking population: Lessons to be drawn from Japan’s experience," The Journal of the Economics of Ageing, Elsevier, vol. 8(C), pages 85-93.
    14. Heller, Peter S., 2015. "The Challenge of an Aged Population: Lessons to be drawn from Japan's Experience," CIS Discussion paper series 651, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    15. Shimizutani, Satoshi & Oshio, Takashi, 2013. "Revisiting the labor supply effect of social security earnings test: New evidence from its elimination and reinstatement in Japan," Japan and the World Economy, Elsevier, vol. 28(C), pages 99-111.
    16. Olivia S. Mitchell & John W. R. Phillips, 2012. "Retirement in Japan and the United States: Cross-national Comparisons using the Japanese Study of Aging and Retirement (JSTAR) and the U.S. Health and Retirement Study (HRS)," Working Papers wp270, University of Michigan, Michigan Retirement Research Center.
    17. Oshio, Takashi & Shimizutani, Satoshi & Oishi, Akiko S., 2020. "Examining how elderly employment is associated with institutional disincentives in Japan," Journal of the Japanese and International Economies, Elsevier, vol. 56(C).
    18. Takashi Oshio & Satoshi Shimizutani, 2012. "Disability Pension Program and Labor Force Participation in Japan: An Historical Perspective," NBER Chapters, in: Social Security Programs and Retirement around the World: Historical Trends in Mortality and Health, Employment, and Disability Insurance Participatio, pages 391-417, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    social security program; social security wealth; labor force participation of the elderly;
    All these keywords.

    JEL classification:

    • H55 - Public Economics - - National Government Expenditures and Related Policies - - - Social Security and Public Pensions
    • J26 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Retirement; Retirement Policies

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