Long-Term Care Policy Reform in Japan

Summary

The implementation of Japan's Long-Term Care Insurance Scheme in April 2000 was the culmination of some 30 years of policy deliberation on aged care. Understanding the policy debate surrounding the Long-Term Care Insurance scheme and its financing arrangements requires an appreciation of rapid demographic and social change, especially in family structures and attitudes to caring for aged parents; but the pressures that population aging and economic downturn are placing on Japan's pension and health insurance systems also must be recognized. Even more generally, the delicate balance of political interests in Japan's central governing body, the Diet, has shaped the implementation of Long-Term Care Insurance as a forerunner to other reforms in social security and health insurance.     

Policies for a Smoother Transition from Work to Retirement

Japan has maintained a relatively high labor-force participation rate among older people. Although the rate had declined steadily until the mid-1980s, the trend has since reversed and the participation rate is expected to rise in the future. In contrast, the laborforce participation of older people has sharply declined in the United States and European countries, especially since the 1970s. This article explores why Japan's experience differs markedly from other advanced countries. Improved pensions have a strong influence toward early retirement, even in Japan. However, other factors such as a low replacement ratio, improved health, and several loopholes in the income test of the pension systems push up the participation rate of older people. The government also encourages active labor-force participation of senior citizens by introducing reformed partial working pensions and wage subsidies for workers in their second and third careers.     

Labour segmentation and outmigration in Japan: Evidence using firm–worker matching data

Determinants of foreigner outmigration from host countries have attracted considerable attention. However, minimal research examines the influence of firms’ working environments. Although the third largest economy, Japan's inability to attract skilled foreign labour remains a concern. This study is the first to investigate the effect of Japanese firms’ labour segmentation practices on foreign workers’ outmigration intentions. Segmentation refers to firms’ concentration on foreigner-specific skills, regarding foreign labour as complementary to local workers. This is widely practised because of immigration policy's avoidance of substituting Japanese labour or causing unemployment. The findings suggest that although foreigner-specific skills are highly valued in Japan, segmentation could significantly increase foreign workers’ outmigration intention. The lifetime employment system in Japan, job satisfaction and original migration motivations also affect outmigration. The results indicate that Japanese policies encouraging firms to employ foreign workers as complementary may harm its attractiveness to skilled foreign labour.     

Japan's Financing Systems for Health Care of the Elderly

The multiplicity of Japan's health insurance system fails to achieve equality among the different insurance groups of the sharing of the financial burden. This "horizontal" inequality is effectively offset by a unique redistribution mechanism established in 1982. However, there is no reserve fund so that savings can be accumulated for the greater financial need in the future. This will inevitably lead to a heavier financial burden for the future working generation or more utilization of the personal assets of the elderly. How to achieve "vertical" or intergenerational equality in financing the cost of health care for the elderly is the biggest social policy challenge for Japan.     

Are You Sitting Comfortably Then We'll Begin: Three Gripping Policy Stories About Pension Reform

Throughout the 1990s, the issue of how to secure pension systems in the face of demographic change has been high on policy agendas in many countries. Yet, reforming pension systems has, more often than not, proved to be a particularly difficult and awkward political undertaking. The following article explores one of the many possible reasons why pension reform in Europe has been so arduous for the would-be reformers. After briefly reviewing some basic concepts and issues involved in reforming social security systems, the paper concentrates on how policy actors at international level have constructed the pension policy issue. Specifically, the paper reviews three pension reform policy stories. Each of the stories starts from differing assumptions, produces contradictory prognoses of the pension problem, and prescribes diverging policy solutions. Significantly, each policy story provides a normative vision of a 'good' pension reform. Thus, policy stories provide templates for producing plausible policy arguments in politiucal debates: yet, thay do so by weaving scientific knowledge, 'objective' fact and normative convictions about social welfare systems into a seamless rhetorical fabric. The final section, then, looks at the seams by analysing the more contentious assumptions of the different policy arguments.     

The Challenge of an Aging Work Force

This article reviews labor-force trends and olderworker employment policies in Japan and the United States. Both countries have aging work forces, but Japan's labor force is and for some time has been older than that of the United States. Japan's Ministry of Labor began addressing older-worker issues over 30 years ago and in the ensuing years has promulgated numerous initiatives to extend working life. Mandatory retirement, however, remains both legal and common in Japan, yet labor-force participation rates are higher for older persons in that country than in the United States, where mandatory retirement is illegal. Japan's older-worker programs and policies clearly seem to have an impact on labor-force rates, although those rates are dropping among the elderly in Japan as well as in the United States. The transferability of these programs and policies to the United States is discussed.     

NeoLiberalism and the Challenges of Managing Labour Migration in Urban Malaysia

Labour migration into Malaysia has increased rapidly in recent decades and this has affected Malaysia's government policy in managing migrants’ movement. Interestingly, Malaysia has attracted a high degree of unskilled labour, accompanied by unabated rise of undocumented migrant workers. Mitigating undocumented migration is the main aim of Malaysia's labour migration policy and therefore the focus of Malaysian government. This has impacted on how enforcement agencies work out strategies. These agencies are the forefront of Malaysia's labour migration policy but they faced a number of challenges, such as documentation, finance and manpower capability, and political intervention, which impede their ability to optimize their capabilities in enforcing the Malaysian government labour migration policy. Resolving these challenges and moving towards a long‐term labour migration policy will benefit the Malaysian state, its citizens and the labour migrants.     

Profiles of refugee and non-refugee Palestinians from the West Bank and Gaza

Relying on demographic and labour surveys which the Palestinian Central Bureau of Statistics collected in 1995, this article investigates the profile of West Bank and Gaza refugees. Refugees are better educated and have higher fertility than non-refugee Palestinians, but the difference is small. However, they have a significantly lower participation rate, a higher unemployment rate and a higher incidence of arrests and work stoppage than the corresponding rates among non-refugee Palestinians. A smaller proportion of Palestinians commute to work into the Israeli labour market and refugees earn lower wages than non-refugees. Returns to investment in education are small for both groups. High fertility among refugees imposes a future challenge for policy makers in terms of resources required for the provision of appropriate education and health facilities. Employing future labour market entrants is another serious policy challenge.     

Regionalization,economic restructuring and labour migration in Singapore

This paper documents the impact of economic development on changes in employment and labour migration in Singapore.
High export-led growth and the relaxation of immigration policies in the late 1960s enabled employment of substantial numbers of unskilled foreign labour in manufacturing, construction and domestic service sectors. Unskilled foreign labour in Singapore now totals about 350,000 or 20 per cent of the labour force. It has made possible an augmentation of domestic labour supply and skills which helped Singapore to achieve higher rates of economic growth. On the negative side, the influx of foreigners has been cited as one possible cause of low productivity growth in the 1970s. In addition to the increased demand on housing, the social costs of crime and the potential economic consequence arising from strained diplomatic ties with the source countries are also areas of concern.
Economic development in the 1990s, characterized by the regionalization drive which relocates relatively resource-intensive operations of Singapore-based companies overseas, has led to increased retrenchments and a moderation of demand for foreign workers. The upgrading of remaining production operations in Singapore is expected to increase demand for workers with higher skill levels. Emigration of highly educated and skilled professionals from Singapore became a national concern in the late 1980s. However, with regionalization, the new challenge in the 1990s has become one of encouraging Singaporeans to temporarily take up overseas positions.
The future foreign labour pool in Singapore is expected to comprise a growing proportion of skilled workers to sustain the 7–8 per cent economic growth rate in the medium term. Slower economic growth in the developed economies and the internationally competitive salaries paid to professionals in Singapore are expected to continue to reduce the outflow of permanent emigrants from Singapore.     

Immigrants in the Old‐Age Pension System: The Case of Sweden

The article investigates incomes and especially state pensions 2008 among elderly immigrants who arrived in Sweden before 1970. At age 70 and above, the level of state old‐age pension for immigrant men was nearly the same and for immigrant women somewhat higher than for natives with similar characteristics. At age 65–66 the state pension was lower for immigrants than for their native counterparts. The differences in pensions for immigrants of different ages are probably due to changed rules in the Swedish state old‐age pension system from 2003. The new rules have hit different age groups in different ways. The gaps are partially levelled out when other incomes are included. The extent to which levelling occurs varies greatly between different immigrant groups. For immigrants who have arrived during the last decades, the future state old‐age pension outcomes are expected to be worse.

Policy Implications

• The Swedish Pensions Agency should set up a register of pensions from abroad. This will tell us to what extent old‐age pensions from the home country compensate for low old‐age pensions from the Swedish system.
• Better integration on the labour market is a powerful measure for reducing the risk of future low pensions among immigrants. This is a challenge for Swedish integration policy.
• To what extent can other parts of the Swedish welfare system in the future compensate individuals with low old‐age pensions?

     

Six central features of the Chinese labour market: A literature survey

In this comprehensive analytical overview, the author pays particular attention to the changing structure of China's employment towards more private‐sector jobs in urban areas; its rising wages and widening earnings inequality; the persistence of its hukou system, causing labour market discrimination, an urban labour shortage and a rural labour surplus; its more market‐oriented wage structure, albeit with segmentation between firm ownership types; its relatively low unemployment; and the relatively weak role of its traditional labour market institutions, including minimum wages and trade unions. The aim is to contribute to the development of more suitable, China‐specific theoretical models and sound policy analysis.     

The segregated participation of women in the Canadian labour force, 1941-71*

L'article examine les emplois des canadiennes principalement à partir des données du recensement. Malgré le changement des attitudes par rapport au travail féminin et l'accroissement considérable de la participation féminine dans la force du travail, la ségrégation professionnelle demeure virtuellement la même entre 1941 et 1971. La plupart des femmes au travail continuent àêtre concentrées dans quelques emplois, emplois à prédominance féminine. Les femmes se joignent à la force du travail par nécessitééconomique et on peut établir une relation entre l'accroissement de la participation féminine et de la disparitééconomique par une analyse des mouvements dans la distribution du revenu au cours des années et dans le nombre recevant un revenu dans chaque famille. Finalement, le bas salaire des femmes au travail et l'écart grandissant entre les hauts et les bas revenus ont été camouflés par l'énorme croissance du nombre de femmes mariées dans la force du travail. Using primarily census data, we examine the jobs held by Canadian women. Despite changing attitudes to women's work and despite the substantial growth in the labour force participation of women, occupational segregation stays virtually unchanged between 1941 and 1971. Most working women remain concentrated in a few jobs, jobs which are dominated by female workers. Economic need has been chiefly responsible for their joining the labour force, and a link can be established between increasing female participation and growing economic disparity by analysing shifts over the years in income distribution and in the number of income recipients per family. Finally, both the low pay for women workers and the growing disparity between high and low individual income recipients have been camouflaged by the tremendous growth in the number of married women in the labour force.     

Temporary Skilled Migration to Australia: Employers' Perspectives1

With the 1996 introduction of a new visa making it easier for employers to sponsor skilled foreign workers, temporary skilled migration has become a significant component of international migration flows to Australia. This paper examines employers' reasons for sponsoring skilled workers from abroad, their modes of recruitment, the occupational skills they require, and their industry profile. We also discuss issues relating to the perception of a shortage of skilled workers, the extent that sponsoring foreign workers substitutes for investing in local training, and the role of networks in recruiting overseas workers. Many employers' now have a global view of labour recruitment. While this is understandable for multinational companies with global operations, many small businesses and public sector institutions are adopting the same strategy to obtain skilled labour which they say is in short supply in Australia. With the internationalization of the Australian economy, there is also an increasing demand for people with specialized skills and knowledge that is not available in Australia's relatively small labour market. An understanding of the demand factors motivating temporary skilled migration is crucial to effectively managing Australia's migration and labour trends.     

CAN GUEST WORKERS SOLVE JAPAN'S FISCAL PROBLEMS?

The labor force in Japan is projected to fall from 64 million in 2014 to 20 million in 2100, signaling unprecedented tax/transfer adjustments to achieve fiscal sustainability. In this paper, we develop a quantitative overlapping generations model to measure the impact of guest worker programs in Japan. Against a baseline general equilibrium transition in which the consumption tax adjusts to achieve fiscal sustainability, we compute alternative transitions with guest worker programs. Depending on the size and skill distribution of guest workers, these programs may mitigate Japan's fiscal imbalance problem with a relatively manageable increase in the consumption tax. (JEL E2, E6, H5, J11, J15)     

Career Counseling in Japan: Today and in the Future

The number of young people who postpone their career decision is increasing in Japan, as is the high unemployment rate. In companies, on the other hand, the traditional seniority system and lifetime employment, which once provided job security for corporate employees, began to collapse. Employees' work ethics and corporate attitudes toward workers have also changed. Under such circumstances, career counseling is the focus of public attention. In this article written in 1999, the author examines some problems in Japan's career counseling, compared with career counseling in the U.S., and discusses which course Japan's career counseling should take to cope with dramatic social changes.     

50 + among the 50+: who works long workweeks among older workers in Canada?

The focus of this short report is on workers who are 50+ years of age and who have a work schedule averaging 50+ hours per week (i.e. a ‘long workweek’), using Statistics Canada's linked Workplace and Employee Survey (WES) 2005 microdata, as well as selected qualitative study findings. The results show that the proportion having a long workweek is actually higher among older workers relative to others. Also, mean job satisfaction among older workers with a long workweek is at least as high as older workers without one, whether or not controlling for other factors. In terms of the characteristics of older workers with a long workweek, this is overwhelmingly a male-dominated group, and the majority are in a managerial/professional occupation. Thus, they do not exhibit the characteristics typically associated with those having poor quality schedules or employment. Since older workers represent a growing proportion of labour markets in industrialised nations, it is important that these workers access sufficiently attractive employment opportunities to keep them in the labour force. However, the findings provide yet another reminder that workers' scheduling realities and preferences are not homogeneous.     

Bridging the Institutional Gaps: International Education as a Migration Industry

This article examines the education‐migration industry that has channelled students from China and Viet Nam into Japan over the past three decades and discusses the conditions for the emergence of such an industry, the major actors and the reasons for their changing roles and practices. It argues that the education‐migration industry in Japan emerged because of the discrepant institutional logics. Japan's reluctance to open the door for labour import, despite its acute labour shortage, has turned international education into a sanctioned channel of labour migration and thereby created opportunities for international education to become a thriving migration industry. As long as this institutional gap remains, government regulations will only create new sources of power and profits for brokers who can navigate complex regulations and employ illicit means to satisfy the legal requirements. The education‐migration industry is therefore a derivative of Japan's immigration regime and actively interacts with government policies.     

Palestinian labour mobility

"Following an overview of demographic and migratory trends since the late 1960s, the article examines labour force participation and analyses the distribution of Palestinian workers between the three labour markets in which they participate: the domestic market of the West Bank and Gaza Strip, the Israeli market and the Arab market, consisting chiefly of Jordan and the oil-rich Arab states. Since 1982 there has been a contraction of employment opportunities for Palestinians in the latter two labour markets. Domestic job creation is one of the main tasks confronting the Palestinian administration to be set up under the 1993 Israel/PLO agreement."     

Shaped by place? Young people's aspirations in disadvantaged neighbourhoods

This paper aims to better understand the relationship between young people's aspirations towards education and jobs, and the context in which they are formed, especially to understand better the role of disadvantaged places in shaping young people's aspirations. Policy makers maintain that disadvantaged areas are associated with low aspirations and there is support for this position from academic work on neighbourhood effects and local labour markets, but evidence is slim. Using a two-stage survey of young people in disadvantaged settings in three British cities, the paper provides new data on the nature of young peoples’ aspirations, how they change during the teenage years, and how they relate to the places where they are growing up. The findings are that aspirations are very high and, overall, they do not appear to be depressed in relation to the jobs available in the labour market either by the neighbourhood context or by young people's perceptions of local labour markets. However, there are significant differences between the pattern of aspirations and how they change over time in the three locations. The paper then challenges assumptions in policy and in the literature that disadvantaged places equal low aspirations and suggests that understanding how aspirations are formed requires needs a nuanced approach to the nexus of class, ethnicity and institutional influences within local areas.