Policy implications of demographic change: panel discussion: social implications of demographic change in Japan

Declining population as well as population aging has substantial impacts on the economy and on the society. By contrast, the size of the population usually does not matter for economic development, if it is stable; Switzerland and Sweden, for example, are rich countries with fewer than 10 million people. However, the process of declining does matter, particularly when it is accompanied by a significant change in the age structure. The aging of the population is a more serious issue in Japan than in any other OECD country. First, the speed of aging has been more rapid there, reflecting the rapid economic development in the past, which has been similar to that in other Asian countries. Second, the social system in Japan is heavily dependent on seniority rules, based on the pyramid-like age structure of the past. Third, human resource allocation in Japan is constrained by the fixed social roles for men and women, both at work and at home.Demography ; Economic conditions ; Japan

Reform of the labor market (Japanese)

Deregulation in the labor market is accused of increasing income disparities. Nevertheless, the fundamental reason for the increasing number of non-regular employees is the persistence and significance of rigid hiring practices and the seniority wage system from high growth periods that carry over, into subsequent periods characterized by long-term stagnation of economic growth. A major factor behind the widening of income disparities is that the pursuit of employment stability by particular firms, rather than by the labor market as a whole, is having the effect of differentiating the labor market between what goes on within and outside of those firms. Amid the simultaneous advance of the globalization of economic activity, and the declining as well as the aging of the Japanese population, it is of fundamental importance to correct these disparities by raising wage levels not only by increasing the labor productivity of individual industries, but also by ensuring a smooth transfer of labor from fields of low productivity to those in which productivity is high. Only the traditional form of lifetime employment enjoyed by regular employees is considered to be a "good way of working" despite its strong restrictions such as long working hours and frequent job shifts that employees agree to in return for employment security. Other forms such as temping are "a bad way of working", considered to be insecure, and are subject to stiffening regulatory moves. However, the conversion of 17 million non-regular employees into regular employees cannot possibly be called a realistic policy. Rather, the best direction to take for carrying out a proper reform of the labor market is to lay down equable rules premised on diverse ways of working that make no distinction between regular and non-regular employees, and facilitate the extension of eligibility for employment insurance and social insurance to workers other than regular employees.