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2017 | OriginalPaper | Chapter

8. Population Crisis

Author : Shinji Yamashige

Published in: Economic Analysis of Families and Society

Publisher: Springer Japan

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Abstract

The Japanese population started to decline in 2008, and it is forecasted to shrink further at an increasingly rapid rate (c.f. Fig. 1.1). Moreover, the number of elderly people (above 65 years old) continues to increase. The elderly ratio, that is, the ratio of the elderly people to the total population, will peak at around 38% in 2050 before leveling out.

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The estimate of Japanese population in this book is the one reported by NIPSSR in 2017 except for the estimate for 3300 which is the one in Coulmas et al. (2008).

Notice that if everyone has children who support their parents, we do not need the pay-as-you-go pension system.

Poor people tend to have more children because they cannot earn enough money to save for their lives after retirement, and thus, need to rely on their children.

This means that, under the pay-as-you-go system, raising children generates positive externalities in the society as the people enjoy its benefits without having to raise their own children.

Needless to say, everyone must have paid pension contribution to get the pension payment. However, the pension system needs young generation for its sustainability. Hence, those who have no children are making insufficient contribution to the pension system and free-riding on children of others.

See NIPSSR (2014) for an overview of the social security system of Japan.

About a third of the social security payment, including the public assistance, is financed by the tax revenues and public deficit.

Recently, Japanese government started to explain the public pension system is a two-tier system and the third tier is provided as private pension. However, pensions in the third tier are heavily regulated by the government and rich tax measures are given to them. Hence, we describe the Japanese public pension system as the three-tier system. The government has been encouraging people to participate in pensions in the third tier to prepare for the reductions in the “public pension.” Category-3 people are now able to participate in a defined-contribution pension from 2017.

The copayment rate is slightly adjusted depending on age and income.

Big companies can have their own health insurances for their employees and their families. Workers in small and medium sized companies participate in a publicly organized health insurance for them. Workers in the public sector can participate in the health insurances for them.

Insurance premiums for the national health insurances are different depending on where people live.

The copayment rate is dependent on age and income.

Del Boca and Vuri (2007) showed that the rationing in the use of the childcare.

See Takeda (2005, Chap. 6) for the historical development of family policies after the 1990s.

An official estimation of the number of children who cannot get into publicly certified nurseries is more than 20,000. However, the government’s estimate of the excess demand depends on the definition and timing of the estimates. The potential excess demand for nursery services is considered to be much larger.

See Yamashige (2014) for more discussion on the issue in the chapter.

Some countries, such as France and Ireland which have exceptionally high total fertility rates compared with their female labor participation rates (i.e., large positive deviations from the regression line in Fig. 8.10b), are spending fairly large cash benefits for families. For example, the cash benefit for families in France is 1.57% and that of Ireland is 2.93%, while that of Japan is 0.88%, as percentage of GDP.

Such a policy would be an inevitable choice if the Japanese government suffers a financial collapse.

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Becker, G., & Barro, R. J. (1988). A reformulation of the economic theory of fertility. Quarterly Journal of Economics, 103, 1–25.CrossRef

Coulmas, F., Conrad, H., Schad-Seifert, A., & Vogt, G. (Eds.). (2008). The demographic challenge: A handbook about Japan. Leiden: Brill Academic Publishers.

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Yamashige, S. (2014). Population crisis and family policies in Japan. University of Tokyo Journal of Law and Politics, 11, 108–128.

Title: Population Crisis
Author: Shinji Yamashige
Publisher: Springer Japan
Book: Economic Analysis of Families and Society
Print ISBN: 978-4-431-55907-8

Electronic ISBN: 978-4-431-55909-2

Copyright Year: 2017
DOI: https://doi.org/10.1007/978-4-431-55909-2_8