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This paper analyzes various reform options for Japan's public pension in light of large fiscal consolidation needs of the country. The most attractive option is to increase the pension eligibility age in line with high and rising life expectancy. This would have a positive effect on long-run economic growth and would be relatively fair in sharing the burden of fiscal adjustment between younger and older generations. Other attractive options include better targeting by \"clawing back\" a small portion of pension benefits from wealthy retirees, reducing preferential tax treatment of pension benefit incomes, and collecting contributions from dependent spouses of employees, who are currently eligible for pension benefits even though they make no contributions. These options, if implemented concurrently, could reduce the government annual subsidy and the government deficit by up to 1¼ percent of GDP by 2020.

The World Bank Group has responded to the global economic crisis with a strong countercyclical expansion of financing. Its disbursements of 80 billion in the past two fiscal years were the largest among the Multilateral Development Banks. There was notable variation across the WBG, with vastly increased IBRD lending, moderately higher IDA financing, and overall responses from IFC and MIGA that were not counter-cyclical. The differences reflected the interplay of financial capacities, business models, and available instruments. While the level of financial flows is one aspect of crisis response, the crucial aspect is the results achieved with such financing and the related knowledge work of the WBG.The question going forward concerns the effectiveness and sustainability of the crisis response. Effective and efficient use of funds to sustain growth and ensure macroeconomic stability is more important than ever in view of emerging fiscal deficits and financial stress in client countries. It is vital that the WBG support help clients keep focused on structural reforms for inclusive and environmentally sustainable growth. The WBG needs mechanisms to ensure early warning and preparedness in the face of an increasingly uncertain global environment. Skills and institutional capabilities in key thematic areas, such as the financial sector, need to be maintained. Attention is also needed to ensure that knowledge activities are not crowded out in the face of tight budgets and resource demands resulting from increased lending.

In nearly every industrialized country, large aging populations and increased life expectancy have placed enormous pressure on social security programs—and, until recently, the pressure has been compounded by a trend toward retirement at an earlier age. With a larger fraction of the population receiving benefits, in coming decades social security in many countries may have to be reformed in order to remain financially viable. This volume offers a cross-country analysis of the effects of disability insurance programs on labor force participation by older workers. Drawing on measures of health that are comparable across countries, the authors explore the extent to which differences in the labor force are determined by disability insurance programs and to what extent disability insurance reforms are prompted by the circumstances of a country's elderly population.

\"Japan's birthrate fell to a record low of 1.29 [in 2003]...renewing fears about the country's ability to support its graying population in coming decades.\" (Dayton Daily News) Learn why Japanese officials are concerned with the nation's declining birth rate. The impact of the slowing birth rate on Japan's economy, reasons for the decline and government efforts to promote childbearing are discussed. Statistics about birthrates in Japan are presented.

In Japan, intergenerational inequality in lifetime resources is substantial, with a heavier fiscal burden on the young than the old. Moreover, given the need for fiscal consolidation, the inequality is even worse than existing policy would suggest. However, this does not mean that fiscal consolidation would make the young worse off. Lack of fiscal consolidation would eventually increase interest rates, which would reduce output and hit young generations harder. Simulations using an overlapping generations model indicate that, from the perspective of intergenerational fairness, it would be desirable to include both social security spending reforms and revenue measures in a fiscal consolidation package. The simulations also show that delaying fiscal consolidation could be costly and worsen intergenerational resource inequality.

Japan is aging and has the highest government debt-to-output ratio among advanced economies. In this article, we build a micro data-based, large-scale overlapping generations model for Japan in which individuals differ in age, gender, employment type, income, and asset holdings, and incorporate the Japanese pension rules. Using existing pension law, current fiscal policy, and medium variants of demographic projections, we produce future paths for government expenditures and tax revenues, with implications for government debt and the public pension fund. Additional pension reform, a higher consumption tax, and higher female labor force participation help achieve fiscal stability.

This study explores the hypothetical elimination of Japan’s retirement earnings test (ET) for public pensions, focusing on its implications for older workers’ labor supply and pension-claiming behaviors. The ET currently reduces public pension benefits for individuals aged 65 and older if their earnings exceed specified thresholds, potentially discouraging employment in this demographic. Notably, the Japanese ET influences both immediate and future pension benefits, thus diminishing current payouts for working pensioners and foregoing beneficial actuarial adjustments—adjustments based on actuarial calculations that would otherwise increase future benefits to account for delayed pension claims. This dual impact may discourage the labor supply and influence pension-claiming behavior among older workers. Through a survey-based experiment with male workers aged 40–59 years expected to face the ET upon retirement, we assess three reform scenarios as the first study in the literature: (1) eliminating future benefit reductions through actuarial adjustments, thereby enhancing the value of deferred pension claims; (2) removing immediate benefit suspensions to increase current pension payments directly; and (3) a comprehensive reform combining both approaches. Our findings reveal that eliminating reductions through actuarial adjustments increases the intensive margin (labor hours and income) and encourages delayed pension claims. Conversely, removing immediate benefit suspensions influences both the extensive margin (decision to work) and the intensive margin but leads to earlier pension claims. By highlighting the importance of differentiating between immediate and future benefit components in designing ET reforms, this study demonstrates their significant impact on labor supply and pension-claiming decisions.

Conventional measures of population aging, such as proportions over age 65, can present a misleading picture of the aging process by not taking account of changes in people's characteristics beyond their chronological age—for example, changes in remaining life expectancy, health and morbidity, disability rates, and cognitive functioning. The \"characteristics approach\" set out in this article encompasses multiple features of population aging, yielding new measures that can better inform both demographic analysis and public policy debate. We relate the brief history of this approach, examine its basic mathematical structure, and give empirical examples of the insights it offers, drawing on data from West Germany, Japan, Russia, and the United States.