Japan should reform retirement policies to meet challenge of ageing workforce

Abe 2019 Japan

UN Photo/Cia Pak Prime Minister Shinzo Abe of Japan addresses the seventy-third session of the United Nations General Assembly.

This article is brought to you in association with OECD.


Japan must improve job quality and further reform the mandatory retirement age to address upfront the challenges of its rapidly ageing and shrinking labour force, according to a new OECD report.

Working Better with Age: Japan highlights that Japan has the highest old-age dependency ratio of all OECD countries, with over one person aged 65 and over for every 2 persons aged 20 to 64 in 2017. This is projected to rise to almost 8 for every 10 in 2050. If work patterns remained unchanged in Japan, its labour force will fall by 8 million by 2030. However, this could be reduced to a smaller fall of 2.4 million if conditions are created to allow older people to continue contributing their skills to the economy, and if more women are encouraged to remain in the labour force.

“Japan already has one of the highest participation rates for older people in the OECD”, said Gabriela Ramos, OECD Chief of Staff and G20 Sherpa, at the launch of the report taking place in Tokyo. “But Japan needs to do more to make its labour market more inclusive for women, non-regular workers and the many workers who face a job change following mandatory retirement at 60.”

Further progress in fulfilling G20 commitments to reduce the labour participation gap between men and women by 25% by 2025 will help offset a shrinking labour force while boosting incomes and pensions at older ages and reduce inequality.

The report stresses that some progress has been made to encourage employers to retain older workers after mandatory retirement up until the age of 65. However, due to Japanese employment practices, these workers are often re-hired as non-regular workers in poor quality, insecure and low-paid jobs.

Encouraging greater involvement of Japanese women at younger ages in the labour market is also an important factor to increase the labour force, the report notes. At just under 78% in 2017, the participation rate of prime-aged women (25-54) in Japan is well below the rate in a number of other advanced OECD countries. Even for those Japanese women who return to work after having children, poor job quality is an issue as many of them end up in a non-regular job, with a junior, part-time position. Greater opportunities for flexible working are necessary, to allow women to manage better their work and caring responsibilities for children and elderly parents. This would help keep women in the workforce.

Reforming employment regulation as well as seniority wages that encourage employers to use more precarious forms of employment would help tackle labour market dualism. At the same time, providing non-regular workers with more training and better working conditions, such as reducing excessive overtime hours would improve their employability and chances of continuing to work at an older age.

Recent government initiatives to promote a job- and performance-based system for setting wages and tackle excessive hours of work have the potential to help improve the productivity and working conditions of older workers. Fundamentally, cultural change is needed to promote a more balanced work life balance, which could deliver better for all but particularly for the elderly, women and children.

“Towards the end of their working lives, older workers deserve better than non-standard contracts, if they still wish to work. We should also ensure society can fully benefit from the wisdom, skills and experience that eldery people bring to the labour market as well as to the broader economy. Japan must therefore increase the mandatory retirement age to reduce this risk, and in the long-term abolish it altogether as done in several other OECD countries”, said Gabriela Ramos. Providing good opportunities for workers to upgrade their skills and learn new ones throughout their working careers is also a key requirement for fostering longer working lives in good quality jobs.

The OECD recommends that Japan take further action in a number of areas:

  • Undertake further reform of mandatory retirement age and seniority wages to encourage employers to hire and retain older workers
  • Tackle labour market dualism by reducing the incentives for employers to hire workers using non-regular, precarious forms of employment
  • Invest in lifelong learning to support the good foundation skills among older and younger Japanese adults and reduce inequalities in training participation by age, skill and type of employment contract
  • Improve job quality to increase opportunities for workers to continue working at an older age by: tackling excessive hours of work; adequately implementing the Work Style reforms; and adopting more systematic and obligatory psychosocial risk assessment of working practices
  • Boost opportunities to combine work and care for children and elderly parents in order to help women to (re-)enter and stay longer in the workforce

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

Advertising

the European Sting Milestones

Featured Stings

These campaigners want to give a quarter of the UK back to nature

How to build a more resilient and inclusive global system

Stopping antimicrobial resistance would cost just USD 2 per person a year

COP21 Breaking News_10 December:#ParisAgreement: Points that remain in suspense

MEPs want to ensure sufficient funding for Connecting Europe’s future

This Netherlands football stadium creates its own energy and stores it in electric car batteries

“Be aware where you put your I Agree signature on and something else”; now Facebook by default opts you in an unseen private data bazar

Commuters in these cities spend more than 8 days a year stuck in traffic

Energy Union: EU’s effort towards a cleaner climate with integrated energy market

Here are 3 alternative visions for the future of work

Is the European Banking Union an impossible task?

Scotland and First Minister Salmond enter the most challenging battlefield for independence: Europe

This heroic doctor is waging war on rape and the stigma around it

“I believe that startups are for grown-up men, those, who have already achieved something “

Trump and Brexit: After the social whys the political whereto

Central African Republic: UN chief hails signing of new peace agreement

Main results of G20 summit in Buenos Aires, Argentina

In Gaza, UN envoy urges Israel, Palestinian factions to step back from brink of a war that ‘everybody will lose’

‘Stop and listen’ to victims of terrorism, UN chief urges in message marking international day

He died so I could live: UN peacekeeper pays tribute to fallen colleague

Costa Coffee products (Copyright: Costa Coffee; Source: Costa Coffee website, Press area)

The start of the “Caffeine rush”: Coca-Cola acquires Costa Coffee days after Nestlé-Starbucks deal

A call for a new crop of innovators

“At the Environment Assembly citizens expect clean, not hot air”, the Head of UN Environment in Europe underscores in a Sting Exclusive

European Business Summit 2013: Where Business and Politics shape the future

It’s time for cybersecurity to go pro bono

“America first” policy goes against EU-US partnership, say MEPs

Why Eurozone urgently needs the ECB to print and distribute at least €500 billion

Online platforms required by law to be more transparent with EU businesses

Norway is known for its cold weather – but it’s been in the grip of a severe heatwave

3 ways activists are being targeted by cyberattacks

New state aid rules: Commission increases national support to farmers up to €25,000

The hidden cost of the electric car boom – child labour

Climate Change : An Already Health Emergency

VW emissions scandal: EU unable to protect its consumers against large multinationals

Libya: Attack on foreign ministry, an attack on all Libyans, stresses UN envoy

The Banking Union divides deeply the European Union

Why medicine is relevant to the battle against climate change

How Europe beat the financial crisis – and the risks it still faces

New European frontiers for renewable energy development

UNICEF delivers medical supplies to Gaza in wake of deadly protests

The world’s e-waste is a huge problem. It’s also a golden opportunity

Predatory labour taxation not an issue for the Commission

Security Council renews mandates of UN force monitoring separation area between Israel and Syria; AU-UN hybrid mission in Darfur

New identity cards deliver recognition and protection for Rohingya refugees in Bangladesh

Draghi sees inflationary bubbles

Violent disorder is on the rise. Is inequality to blame?

Multilateralism: The only path to address the world’s troubles, signals Guterres

Bundesbank’s President Weidmann criticises France and the EU. Credibility at risk?

EU unfolds strategy on the Egypt question

GSMA outlines new developments for Mobile World Congress Shanghai 2018

The Fourth Industrial Revolution is driving Globalization 4.0

EU to scrutinise foreign direct investment more closely

Employers’ organizations work towards improving the enabling environment for sustainable enterprises

Africa-Europe Alliance: first projects kicked off just three months after launch

Reinforcing EU border security: Visa-exempt travelers will be pre-screened

Sub10 Systems @ MWC14: Bridging the Ethernet of the Future

ECB: The bastion of effective and equitable Europeanism keeps up quantitative easing

Our present and future tax payments usurped by banks

UN welcomes Angola’s repeal of anti-gay law, and ban on discrimination based on sexual orientation

China is a renewable energy champion. But it’s time for a new approach

Who will win the AI race? If countries work together, then the answer could be all of us

Eurozone: Avoiding a new Greek accident

The Ultimate Career Choice: General Practice Specialist

More Stings?

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s