Working Paper: NBER ID: w24614
Authors: Takashi Oshio; Emiko Usui; Satoshi Shimizutani
Abstract: Japan experienced increases in labor force participation (LFP) of the elderly in recent years, as have other advanced countries. In the present study, we overview the employment trend of the elderly in Japan, and examine what factors have contributed to its increase since the early 2000s. Improved health and longevity, increasing education levels, and a shift towards less physically demanding jobs have allowed the elderly to stay longer in the labor force. However, elderly employment rebound and its timing are more closely linked to changes in social security incentives, especially increases in the eligibility age for public pension benefits. More broadly, reduced generosity in social security programs since the mid-1980s has been a key driver of the long-term trend change in elderly employment. A series of social security reforms have helped utilize the elderly’s potential work capacity, accumulated due to improving health conditions and other favorable factors for LFP in the elderly.
Keywords: elderly; labor force participation; social security; Japan
JEL Codes: H55; J21; J26
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| social security reforms (H55) | elderly labor force participation (J26) |
| increases in eligibility age for public pension benefits (H55) | rebound in elderly employment (J26) |
| reduced generosity in social security programs (H55) | long-term increase in elderly employment (J14) |
| improved health and longevity (I12) | elderly labor force participation (J26) |
| increasing educational levels (I24) | elderly labor force participation (J26) |
| shift towards less physically demanding jobs (J29) | elderly labor force participation (J26) |