| Abstract: |
In some ways, the Japanese system is not unlike that of other industrialized
countries. This is not surprising in so far as Japan, once it opened to the
west in the nineteenth century, made a point of learning from the western
countries. Moreover, although a full public pension system was not properly
established until after the Second World War — no later than in many western
European countries — it was established under the American occupation.
Therefore, similar to other industrial countries, the state has an important
role in providing pensions, and the public system is based upon a
pay-as-you-go principle with a partially proportional benefit formula. Company
benefit systems supplement the public system and, in some cases, predate it.
Despite the similarities with other countries, however, the retirement income
system in Japan does have a number of special characteristics. First, unlike
in many other countries, people in Japan keep working well after the “normal”
retirement age. Second, older people in Japan are much more likely to be
living with their adult children than are older people elsewhere. Thus,
incomes in old age comprise a considerable element of intra-familial
transfers. In these respects, Japan is “a special case.” Like most
industrialized countries, Japan is confronted with the challenge of supporting
a rapidly aging population. Indeed, Japan is aging faster than almost any
other in the industrialized world. In this respect, Japan is not “a special
case.” Moreover, the employment and social structure of Japan is also
changing. Working in older age may be a less viable option in the future. And
families are becoming less willing and less able to provide homes and care
services for their parents. Accordingly, the way that Japan has been “a
special case” may be fading over time, which could undermine retirement income
security. In short, the challenges that Japan faces are more profound than
those faced by many other societies. |