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Aging population in Asian countries |Lessons from Japanese experiences |


  • Ai Oku

    (Policy Research Institute, Ministry of Finance)

  • Eri Ichimura

    (Policy Research Institute, Ministry of Finance)

  • Mika Tsukamoto

    (Policy Research Institute, Ministry of Finance)


Many Asian countries are facing a rapidly aging population. An aging population will cause social security expenditures in national budget to rise. Currently, fiscal conditions in Asian countries are relatively stable, but governments will be required to control social security expenditures to maintain fiscal soundness. Japan established universal health insurance and pension insurance systems in 1961. In 1973, the so called gfirst year of high-level social welfare h, free medical services for the elderly and the indexlinked pension system were started. Currently, in Japan, the aging rate, which measures the share of the population aged 65 years old or over, has reached 27%, while the country continues to face fiscal deficits and government debt has been accumulating. Other Asian countries have started to develop their countries f social security systems, so it is time to review the lessons that can be drawn from Japanese experiences relating to social security expenditures and national budget conditions. In this paper, we focused on Japanese social insurance systems, especially health insurance and pension insurance systems, and addressed some lessons to Asian countries. Lessons from health insurance system are: (1) It is important to determine public contributions f share of medical expenses not by patients f age, but based on their income and assets, (2) To establish universal health insurance system, it is important to ensure the stable financial revenues of insurers with subscribers who are unable to enroll with other insurers. Lessons from the pension insurance system are: (1) It is important for the government to manage sharp acceleration of inflation in such a way as to not increase pension benefits, thereby preventing the financial burdening of future generations, (2) The pension system should be designed based on the long-term projections of the population aging rate and total fertility rate, and policies should be adapted accordingly, (3) It would be preferable that the government take a gMacro-economic slide h pension system which is a fixed contribution schedule coupled with a mechanism to rebalance pension finances through automatic adjustment of benefits.

Suggested Citation

  • Ai Oku & Eri Ichimura & Mika Tsukamoto, 2017. "Aging population in Asian countries |Lessons from Japanese experiences |," Discussion papers ron299, Policy Research Institute, Ministry of Finance Japan.
  • Handle: RePEc:mof:wpaper:ron299

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    More about this item


    population aging; social security system; social benefit; health care; pension; Asia; Japan;
    All these keywords.

    JEL classification:

    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General

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