5 Facts: Japan’s Aging Workforce
Japan’s pension schemes have turned their workforce into one of the oldest in the world.
- The lingering effects of Japan’s deflationary period play an important role in the demographics of its workforce.
- Pension benefits on average amount to just 40.8% of workers’ pre-retirement earnings in Japan.
- The Japanese government has limited options to make its pension system sustainable over the long term.
1. In Japan, 66.9% of workers aged 54 to 65 are still in the workforce, according to OECD data for 2013.
2. The lingering effects of Japan’s prolonged deflation play an important role in the demographics of its workforce.
3. Older people in Japan, uncertain about their future, want — and need — to stay employed to make ends meet.
4. Japan’s social security system provides only modest support for retirees. Pension benefits there on average amount to just 40.8% of workers’ pre-retirement earnings (compared to 65.9% for the average OECD worker).
5. Low pension benefits force many Japanese citizens to work until later in their lives in order to build up savings ahead of an anticipated smaller, fixed income.