An overview of work, retirement, and pensions in Japan

Work to retirement in Japan is a sequential transition for the most part, and Japan permits mandatory retirement by firms at age 60. But many older people work beyond the age of 60, many more than in other industrialized countries. A number of hypotheses are examined, having to do with pensions, health, opportunity, interest in working, cultural attitudes (including the concept of ikigai), and public policy initiatives (such as employment policy and the Silver Human Resource Centers). Japan's cultural attitudes and existing policies appear to have set Japan on a unique course in considering the aging of its population. To what extent should other nations emulate Japan?     

Reforms of Retirement Policies: Three Common Paths in Aging in Japan and Korea

Faced with an unparalleled rate of population aging, Japan and Korea have been reforming their retirement policies. To date, however, while the age of mandatory retirement has increased, employees continue to face significant decreases in compensation and other working conditions, typically at age 60 in Japan and age 55 in Korea. Three factors have contributed to shaping the path of the policy reforms in both the countries, including (1) the productivist welfare regimes, (2) the structure of the labor market for young workers, and (3) seniority-based wage and compensation systems.     

Attitudes About Working Beyond Normal Retirement Age: The Role of Mandatory Retirement

The Dutch government abolished mandatory retirement for national-level civil servants in 2008, but not for employees in other sectors. This study analyzes whether national-level civil servants have different attitudes and plans about working beyond normal retirement age than employees in other sectors. Results show no clear differences between the groups. A national ban on mandatory retirement would presumably not lead to many more older workers continuing to work beyond normal retirement, but would need to be integrated in a much broader policy reform that also addresses employment protection legislation and seniority-based wages.     

Determinants of Retirement Timing Expectations in the United States and Australia: A Cross-National Comparison of the Effects of Health and Retirement Benefit Policies on Retirement Timing Decisions

Data from the U.S. Health and Retirement Study (N = 2,589) and the Australian Household Income and Labour Dynamics survey (N = 1,760) were used to compare the macro-level policy frameworks on individual retirement timing expectations for pre–baby boomers (61+ years) and early baby boomers (45 to 60 years). Australian workers reported younger expected age of retirement compared to the U.S. sample. Reporting poor health was more strongly associated with younger expected retirement age in the United States than in Australia. Cohort and gender differences in the United States were found for the effect of private health insurance on younger expected age at retirement. Our results draw attention to how cross-national comparisons can inform us on the effects of policies on retirement expectations among older workers.     

Social Security Reform Ideas in Japan

Abstract

Japan has a complex social security system. This article discusses the demographic and economic situation in Japan as background for understanding the setting in which the social security system functions. Japan has a three-pillar system for retirement income. The first pillar is the social security pension plan; the second pillar is the voluntary occupational pension plan; and the third pillar is personal savings, including the personal pension plan. The most important part of the retirement income system is the social security pension plan, which paid benefits accounting for 64% of the total income of elderly households in 1998. The five Employees' Pension Plans are established on a compulsory social insurance basis. Most large Japanese employers have a mandatory retirement age. Over 90% of all employees, including public sector ones, must retire from their career jobs at age 60.     

POLICY VARIATION,LABOR SUPPLY ELASTICITIES,AND A STRUCTURAL MODEL OF RETIREMENT

This paper exploits a combination of policy variation from multiple pension reforms in Austria and administrative data from the Austrian Social Security Database. Using the policy changes for identification, we estimate social security wealth and accrual elasticities in individuals' retirement decisions. Next, we use these elasticities to estimate a dynamic programming model of retirement decisions. Finally, we use the estimated model to examine the labor supply and welfare consequences of potential social security reforms. (JEL J26, H55)     

Social security reform ideas in Japan

Japan has a complex social security system. This article discusses the demographic and economic situation in Japan as background for understanding the setting in which the social security system functions. Japan has a three-pillar system for retirement income. The first pillar is the social security pension plan; the second pillar is the voluntary occupational pension plan; and the third pillar is personal savings, including the personal pension plan. The most important part of the retirement income system is the social security pension plan, which paid benefits accounting for 64% of the total income of elderly households in 1998. The five Employees' Pension Plans are established on a compulsory social insurance basis. Most large Japanese employers have a mandatory retirement age. Over 90% of all employees, including public sector ones, must retire from their career jobs at age 60.     

THE ROLE OF FINANCIAL LITERACY IN DETERMINING RETIREMENT PLANS

Workers nearing retirement face many important, and often irreversible, choices. We collected detailed demographic and financial literacy data on over 1,500 workers nearing retirement at three large companies to assess how individuals are planning for retirement. Many respondents display limited knowledge and understanding of public and company‐provided retirement benefits. Controlling for basic demographics and wealth, we find that misconceptions about eligibility ages and plan generosity influence workers' expected age of retirement. Although retirement‐related decisions will affect workers' well‐being for the remainder of their lifetimes, many do not possess enough basic financial knowledge to confidently make optimal choices. (JEL J26, J320, J240)     

The Real Reason 60 Is the New 30: Consumer Debt and Income Insecurity in Late Middle Age

In this analysis, we revisit the arguments made in our 2007 book, Post‐Industrial Peasants: The Illusion of Middle Class Prosperity, and foreshadow our arguments in our forthcoming book, Middle Class Meltdown in America: Causes, Consequences and Remedies (2014, Routledge). The plight of the American middle class has been growing steadily since the early 1980s, and has been compounded further by the recession of 2008–2009 and its aftermath. We extend our prior work by examining the particular effects of long‐term middle‐class decline and the recent recession on Americans over 55 years old. Our retirement savings simulation presents in stark terms the cumulative disadvantage of working in unsteady jobs with stagnant wages over the course of a late‐20th‐ and early 21st‐century work career. In our discussion, we suggest that one cultural adaptation to the retirement savings crisis is the denial of the realities of aging and the suggestion that most age‐related problems are temporary and fixable. In short, we suspect that one reason “60 is the new 30” is because few Americans can afford to be 60.     

Determinants of retirement timing expectations in the United States and Australia: a cross-national comparison of the effects of health and retirement benefit policies on retirement timing decisions

Data from the U.S. Health and Retirement Study (N = 2,589) and the Australian Household Income and Labour Dynamics survey (N = 1,760) were used to compare the macro-level policy frameworks on individual retirement timing expectations for pre-baby boomers (61+ years) and early baby boomers (45 to 60 years). Australian workers reported younger expected age of retirement compared to the U.S. sample. Reporting poor health was more strongly associated with younger expected retirement age in the United States than in Australia. Cohort and gender differences in the United States were found for the effect of private health insurance on younger expected age at retirement. Our results draw attention to how cross-national comparisons can inform us on the effects of policies on retirement expectations among older workers.     

Live to 70 Years and Older or Suffer in Silence: Understanding Health Insurance Status Among the Elderly Under the NHIS in Ghana

Ghana has introduced a National Health Insurance Scheme (NHIS). Embedded in the NHIS is a policy to exempt poor and vulnerable groups from premiums and user fees. There has been some debate as to why the start-off age for exemption among the elderly is 70 years. Ghana has a shorter life expectancy than middle- and high-income countries and its current age of retirement is 60 years. This study explores the financial and social implications of continuing to charge premiums to people aged 60 to 69 years. Based on the analysis of data from a representative household survey, it is recommended that the exemption policy should be expanded to include all vulnerable elderly persons, regardless of age.     

A Comparison of Early Retirement Pensions in the United States and Russia

Abstract

Early retirement pensions for particular occupations free national policy to establish the social security early retirement age at a later age that is more appropriate for the population as a whole. This paper focuses on early retirement pensions in the United States and the Russian Federation. While comparing early retirement pensions generally, the paper provides a more detailed discussion of the pensions for musicians. While this is an unconventional group to choose for the study of pensions, study of their pensions yields insights into the principles underlying retirement age policy in the two countries.     

I Do … Want to Save: Marriage and Retirement Savings in Young Households

Increased policy and academic attention has been placed on promoting retirement savings early in the life course. This study investigates the extent to which retirement savings behavior among young persons, a population for which retirement savings is important but typically low, differs by marital status. We draw national survey data on young adult households (ages 22–35; N = 3,894) from the U.S. Federal Reserve Board's Survey of Consumer Finances (SCF). Results reveal considerable differences by marital status. Controlling for important characteristics, young adults who were married were more likely than all other groups (including cohabitors) to perceive retirement as an important savings goal and to have an individual retirement account. Married persons were more likely than their single counterparts to participate in a defined contribution pension plan. Single women fared particularly poorly on retirement savings outcomes. A range of possible theoretical links between marriage and retirement savings at young adulthood are discussed.     

提前退休，还是延迟退休？

从10月1日起，上海将实施柔性延迟办理申领基本养老金手续。上海市人保局称，上海将男性的退休年龄从60岁延迟到65岁，女性从50岁延迟到60岁。对于延迟退休的政策你是怎么看的？倒顷向于早退休还是晚退休呢？     

Demografische Alterung und Reformen der Alterssicherung in Europa – Probleme der ökonomischen,sozialen und politischen Nachhaltigkeit

Ageing is one of the long-term challenges for old age security in Europe, in particular for the intergenerational contract of pay-as-you go public pensions. The comparative macro-sociological analysis maps the demographic trends, political constraints, and social policy reform dynamics across Europe. Due to demographic ageing all European societies face long-term sustainability problems of their pension systems. Despite many reforms, European welfare states differ in the timing of retirement and the extent of pay-as-you-go public pensions. The comparison of ten European welfare states reveals the cross-national variations in reducing early retirement and in partially shifting to prefunded pensions. In addition to financial sustainability, the contribution also discusses other sustainability issues, particularly social inequality and political feasibility, which must be overcome in addition to the demographic challenge.     

A comparison of early retirement pensions in the United States and Russia: the pensions of musicians

Early retirement pensions for particular occupations free national policy to establish the social security early retirement age at a later age that is more appropriate for the population as a whole. This paper focuses on early retirement pensions in the United States and the Russian Federation. While comparing early retirement pensions generally, the paper provides a more detailed discussion of the pensions for musicians. While this is an unconventional group to choose for the study of pensions, study of their pensions yields insights into the principles underlying retirement age policy in the two countries.     

Retirement plans, personal saving, and saving adequacy

This Issue Brief addresses three questions raised by recent trends in personal saving: How are national savings measured and what is the meaning of the trends in measured personal saving rates, given what is included and what is not included in those measures? What is the effect of retirement saving programs--in particular, 401(k) plans and individual retirement accounts (IRAs)--on personal saving levels? What are the implications of existing saving behavior for the retirement income security of today's workers? The National Income and Product Accounts (NIPA), the most commonly referenced gauge of personal saving, is a widely misunderstood measure. One could argue that a complete measure of saving would include increases in wealth through capital gains, but NIPA does not factor accrued and realized capital gains on stocks and other assets into the saving rate. By one measure, accounting for capital gains results in an aggregate personal saving rate of 33 percent--more than double the rate of four decades ago. A major policy question is the impact of tax-qualified retirement saving plans (i.e., IRAs and 401(k) plans) on personal saving rates. Empirical analysis of this issue is extremely challenging and findings have been contradictory. These programs now represent an enormous store of retirement-earmarked wealth in tax-deferred vehicles: Combined, such tax-deferred retirement accounts currently have assets of about $4 trillion. Ninety percent of IRA contributions are now the result of "rollovers" as employees leave employer plans, like 401(k) plans. While leakage from the system remains a challenge, the majority of the assets in the system can be expected to be available to fund workers' retirements. One could argue that, from a retirement income security perspective, workers in general are better off because IRA and 401(k) programs exist. Surely, many of the dollars in these programs would have been saved even without the programs; but they would not necessarily have been earmarked for retirement and been available to fund retirement expenses. As rollovers become larger, this "partnership" of employment-based qualified plans and IRAs will grow even more important. The evidence indicates that many groups of American workers appear unlikely to be able to afford a retirement that maintains their current lifestyle (at least not without working more years than currently planned). Consensus does not exist on how many workers are at risk or the typical magnitude of their retirement saving shortfall. There is a consensus, however, that a substantial number of individuals are at risk. This is not surprising--despite the fact that the 70 percent of workers are saving for retirement--since relatively few workers know how much it is that they need to accumulate to fund their retirement.     

Lesbian,Gay, Bisexual,Transgender, Queer/Questioning (LGBTQ) Perceptions and Health Care Experiences

The goal of this study was to explore attitudes, health knowledge, and experiences with health care setting and providers among lesbian, gay, bisexual, transgender, queer/questioning (LGBTQ) individuals and to identify areas for improvement. Members of Equality Florida? residing in the five counties of the Tampa Bay region were recruited through e-mail invitation to complete a 60-item questionnaire assessing demographics, attitudes, and experiences with health care providers (HCPs). Additional open-ended questions focused on experiences with HCPs and suggestions for ways to improve HCPs' cultural competency. A total of 632 respondents completed the survey of which 41% were gay men and 29% were lesbian. The majority of participants were White, non-Hispanic (93%), married/partnered (78%), and had health insurance (88%). The majority (67%) reported they always or often disclosed their sexual orientation/identity to an HCP and few had negative reactions in the health care setting (<10%). Health care settings with equality signs and gender-neutral language were perceived as safer. Participants' responses suggested need for policy changes and improved cultural competence among HCPs. Results show high rates of sexual orientation disclosure, greater acceptance from providers of LGBTQ status, and the need for examination of hospital policies and improved cultural competency.     

Changing attitudes to risk at older ages: The role of health and other life events

This paper investigates risk attitudes at older ages in 14 European countries. Older individuals report lower willingness to take risks in all countries. Using panel data we are able to show that this relationship between financial risk attitudes and age is not due to cohort effects or selective mortality. We also show that key mechanisms driving this change with age are health changes and other life events – in our preferred specification around half of the overall evolution of risk attitudes with age can be explained by health shocks, retirement, and widowhood or marital change that occur increasingly frequently as individuals age. These life-events are a particularly important explanation of the evolution of risk attitudes for women.     

Attitudes of Japanese and American Workers: Convergence or Diversity*

Testing an argument of convergence on a sample of employed males in Japan and the United States, this paper compares young: (18–24 years) with older (45–55 years) workers within each country on work-related attitudes, education and employment, mobility, interest in the company, characteristics of superiors, and job satisfaction. Comparisons of these attitudes are also made within age-group cross-nationally. Our general finding, which is upheld when company size, type of job, and educational attainment, are controlled for, is that cultural diversity is (still) a better explanation than convergence when applied to work-related attitudes. Aging per se seems to have some similar effects in both societies, e.g., a positive relationship beween age and work satisfaction. Attitudes affected more by historical changes in work organization, however, exhibit stronger cultural differences than age differences.