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Problems and Policies

How effectively does labor market policy address unemployment?

Based on an exhaustive literature review, and the results from six original researches on long-term care expenditures in Japan LTCE conducted during a doctoral program, the book provides a comprehensive view in analyzing trends and factors associated with increasing expenditures in the Long-Term Care Insurance system in Japan. The book end with a discussion on futures challenges and strategies oriented to contribute with the sustainability of LTCI system in Japan.

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Skip to main content Skip to table of contents. Advertisement Hide. Front Matter Pages i-ix. The Aging Population of Japan. Ageing — Economic aspects — Japan. Labor market — Japan. Hamada, Koichi, —. Kato, Hiromi, —.

Research Interests

A62 Raut Immigration vs. Raut, Lakshmi K. However, they share a common feature: they both deal with intergenerational problems. Moreover, in terms of consumption, slower population growth may slow consumption and help to alleviate environmental problems. On the other hand, a rapidly ageing society may use more energy-intensive technology to compensate for the inevitable labor shortage, and thus cause deterioration on the natural environment.

Economic Analysis

Today, these concerns are highly applicable in Japan. The pressure created by the rapid ageing of the Japanese population is becoming acute; Japan must construct a sustainable society that does not create intergenerational inequity or erode the public welfare. At the same time, Japan cannot deplete its environmental resources and energy, as this would leave future generations with an unbearably heavy burden.

The Japanese government has recognized the vital importance of both problems. While the Millennium Project covers a wide range of topics and disciplines such as natural science and technological innovation, the project conducted by ESRI places major emphasis on social science. While taking into account technological innovation and feasibility, it focuses on ageing and environmental problems.

It aims to design a desirable socioeconomic structure under the pressure of an ageing population and environmental constraints viii Preface ix by identifying the necessary policy tools to attain stable and sustainable growth. The clock is ticking, and the time to act is short, but our problems are not insurmountable. Pessimism is not our rallying call.

Japan Population: Labour shortage threatens Japanese economy

Rather, we are optimistic, and encouraged by the European example. Studies on ageing populations can be divided roughly into three categories: i macroeconomic problems related to the decline in the workforce due to ageing; ii social security systems, with many of the studies looking at pension systems; and iii the labor market, for example, employment of the elderly, competition with younger workers, the female workforce, and immigrant workers. We have made a specialized study of our theme from these perspectives. However, in this study, there were others who expressed a challenging view that various impacts, including those on economic growth, can be coped with fully and overcome by technological progress and other measures.

Accelerated return to prosperity and the realization of economic growth at a comparatively high level would reduce costs and alleviate the distress that a change in the system in the transition period would involve, helping to carry forward the reform smoothly. There is a high possibility that new technology creates new products, stimulating demand, developing new industries with high productivity, and bringing about a renewed sustainable economic growth.

It may sound paradoxical, but past experience suggests that various restrictions imposed on economic activities, and the existence of regulation actually stimulates new technological development which helps to break through the restrictions. Today, environmental issues encompass a very wide range of problems from territorial disposal of waste to the global environmental issues. It has been pointed out that policy mix ingeniously combining such methods as regulatory and economic instruments, voluntary agreements and international emissions trading is essential for coping with these issues.

What is important then is a policy which skillfully uses incentives, making use of market mechanisms.

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Japan is one of the most advanced countries in environment-related technology in the world. It is suggested that concrete behavior by a community based on shared information bottom-up approach and a change in behavior of individual as consumers provide one of the keys in the closed-loop economy and society. Furthermore, some pointed out that, for its climatic and topographical conditions and for its population density, the waste management system in larger cities of Japan can be a model for Asia, and Japan will play an important role in the Asian area in coping with global environment issues.

They are issues closely related to each other and they will require simultaneous decision-making, all of them when a desirable scenario is to be visualized. And both issues of ageing and environment will have a strong impact not only on the welfare of our generation but also on that of future generations. An awareness of issues that are common to the ageing population and the issue of environment is the context in which we should make use of market mechanisms. Research into the ageing population and the environment has thrown into relief the importance of technological innovation.

When we think the 21st century has severe restrictions imposed upon it, such as resources, energy, labor force and population, we may take a positive view of things and say that, conversely, the century carries full conditions that will give birth to technological innovation. If we could succeed in achieving technological innovation in this global situation, formation of more enriched economy and society would be materialized.

In the short term, countries with ageing populations will likely elect to consume more energy — without any thought to the long-term impact of their consumption patterns and economic activity. Without lowering living standards, we must solve global environmental problems, and overcome the constraints of limited energy resources.

Failure to do so may spell the end to our way of life in the not-so-distant future. In this project, we explore optimal solutions to social optimization problems. After taking into account the political and social constraints we face, and after alignment and coordination with the results of the studies, we will sketch out an ideal design and examine the possible direction of future research.

This project came to an end in March It solved many theoretical and empirical issues, but has created new debates. Twice a year, all the members of the project, along with selected participants, met to discuss the results of the research. Regrettably, it has not been possible to reproduce the fruitful discussion in this volume. Overall, the papers presented in the project were extremely challenging, and covered a wide range of topics.

In the near future we very much hope Preface xiii we will have a chance to discuss the research once more from a common standpoint. The result of this research appears in print from Edward Elgar Publishing Ltd as part of the ESRI studies series, available to policy makers, academics and business people with a keen interest in these subjects. The series on ageing problems covers macroeconomics, social security and the labor market.

The research papers to be published were selected by the Editorial Board members. We are particularly grateful to Megumi Sagara for her extensive assistance with all the editorial work.

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We also thank Junko Kiyuna for her expertise in administrative assistance, and Carolyn M. Beaudin for her help with style and overall improvements. One of the most conspicuous changes in Japan is the ageing and decline of its population. The content of the chapters observes the surprising phenomena of drastic ageing and the declining population, and explores new directions of research. At the turn of the new century, Japan has been encountering the advent of a rapidly ageing population. In , about In , This means that there will be about 2. This tendency is not a feature peculiar only to Japan; many other developed countries are following the same trend.

The proportion of those over 65 years of age in the population of the United States, Great Britain, Germany, France and Sweden are expected to reach Thus, similar trends are everywhere in developed countries, but the situation in Japan is probably the most extreme.

The rapid ageing process of the population presents serious questions in terms of its economic and social impact. Japan can be viewed as an xv xvi Ageing and the labor market in Japan experimental ground to test various hypotheses related to these questions. This fact presents a strong contrast to the past state of Japanese economic studies. These novel problems challenge economists to make accurate diagnoses and prescriptions, and they challenge, at the same time, the robustness of conventional theories.

It is hoped that new directions of research and fresh insights in economic logic will be found and developed following the experience in Japan in advance of similar occurrences in other countries. Before facing the ageing problem directly as we are currently forced to do, ageing was often an abstract concept such as the decrease in population growth rate in macroeconomics, unemployment problems in the labor market, and the balance of the social security account.

Literature illustrates various types of serious old age problems. Normally, a graying labor population would mean a higher demand for young workers and college or high school graduates. In reality, however, the conventional pattern of lifetime employment still persists and prevents young people from obtaining the status of full employees.

They are not constrained by the regimen of regular employees, and conduct elegant lifestyles.