Ageing and Employment Policies: Japan (Ageing and Employment Policies)

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Japan In the face of rapid population ageing and the trend towards early retirement, there is a need to promote better employment opportunities for older people. Much has been said about the need for reform of old-age pensions and early retirement schemes but this may not be sufficient to raise employment rates for older people significantly or to reduce the future risk of labour shortages. Both governments and firms will need to take active measures to adapt wage-setting practices to ageing workforces, to address the extent to which other welfare schemes act as pathways to early retirement, to tackle age discrimination and to improve the job skills and working conditions of older workers. In addition, older workers will need to change their own attitudes towards working longer and acquiring new skills. Little is known about what countries have been doing or should be doing in these areas.

This report is based on the proceedings of a seminar and is published in English only. However, a French translation of the Executive Summary and Recommendations has been included in this volume. In the same series: Belgique Finland Luxembourg Spain Suisse Sweden

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ISBN 92-64-02109-4 81 2004 05 1 P

Ageing and Employment Policies

Japan

Japan

This report on Japan is part of a series of around 20 OECD country reports that are intended to fill this gap. Each report contains a survey of the main barriers to employment for older workers, an assessment of the adequacy and effectiveness of existing measures to overcome these barriers and a set of policy recommendations for further action by the public authorities and social partners.



« Vieillissement et politiques de l’emploi

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Ageing and Employent Policies (Vieillissement et politiques de l’emploi)

Japan

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

Pursuant to Article 1 of the Convention signed in Paris on 14th December 1960, and which came into force on 30th September 1961, the Organisation for Economic Co-operation and Development (OECD) shall promote policies designed: – to achieve the highest sustainable economic growth and employment and a rising standard of living in member countries, while maintaining financial stability, and thus to contribute to the development of the world economy; – to contribute to sound economic expansion in member as well as non-member countries in the process of economic development; and – to contribute to the expansion of world trade on a multilateral, non-discriminatory basis in accordance with international obligations. The original member countries of the OECD are Austria, Belgium, Canada, Denmark, France, Germany, Greece, Iceland, Ireland, Italy, Luxembourg, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The following countries became members subsequently through accession at the dates indicated hereafter: Japan (28th April 1964), Finland (28th January 1969), Australia (7th June 1971), New Zealand (29th May 1973), Mexico (18th May 1994), the Czech Republic (21st December 1995), Hungary (7th May 1996), Poland (22nd November 1996), Korea (12th December 1996) and the Slovak Republic (14th December 2000). The Commission of the European Communities takes part in the work of the OECD (Article 13 of the OECD Convention).

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FOREWORD

Older people offer tremendous potential value to businesses, the economy and society. Unfortunately, they often represent an untapped and discriminatedagainst resource, as many public policy measures and private workplace practices pose serious barriers to work, both paid and unpaid. Many of these policies and practices are relics from a bygone era. There is a need to look beyond traditional stereotypes about ageing in order to benefit from the growing numbers of older citizens, many of whom would, in fact, choose to work for longer given appropriate policies and workplace practices. The OECD has reported extensively on public pension and early retirement systems and the need for reforms of these systems to cope with population ageing. However, these reforms will not be enough to encourage later retirement and to reduce the risk of future labour shortages. Measures are also required to adapt wage-setting practices to greying workforces, to tackle age discrimination and negative attitudes to working at an older age, to improve job skills of older people and their working conditions, and to better “activate” older job seekers. Relatively little is known about what countries have been, or should be doing, in these areas. Therefore, in spring 2001, the OECD Employment, Labour and Social Affairs Committee (ELSAC) decided to carry out a thematic review of policies to improve labour market prospects for older workers covering both supply-side and demand-side aspects. For the purpose of this thematic review, it was decided to define older workers as all workers aged 50 and over. The age of 50 is not meant to be a watershed in and of itself in terms of defining who is old and who is not. Perceptions about being old are inherently subjective and only loosely connected with chronological age. However, in many countries, the age of 50 marks the beginning of a decline in labour force participation rates by age. Moreover, to facilitate international comparisons, it is preferable to refer to the same age group for all countries. Thus, all references to “older workers” in this report should be taken as shorthand for workers aged 50 and over (or in some cases, because of data constraints, workers aged 50 to 64), and should not be seen as implying that all workers in this group are “old” per se.

AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

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This report on Japan is one in a series of around 20 OECD country reports that will be published as part of the older worker thematic review, which has been developed by Raymond Torres. It has been prepared by Mark Keese (team leader) and Kimiyo Yagi, together with a contribution to Chapter 3 by Atsuhiro Yamada, Keio University. Technical and statistical assistance was provided by Alexandra Geroyannis, Anne-Marie Gray, Sylvie Jeannot, Clarisse Legendre, Steven Tobin and Judy Zinnemann. A draft of the report was discussed at a seminar in Tokyo on 24 February 2003 on “Ageing and Employment: Challenges and Policies in Japan”, which was organised by the Japanese Ministry of Health, Labour and Welfare. Discussants at the seminar included representatives of the national authorities and the social partners, as well as several academics. The final report, which incorporates the comments received at the seminar, is published in this volume on the responsibility of the Secretary-General of the OECD.

*** This report is based on the proceedings of a seminar and is published in English only. However, a French translation of the Executive Summary and Recommendations has been included in this volume (p. 25). ***

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TABLE OF CONTENTS

EXECUTIVE SUMMARY .............................................................................. 11 The challenge ahead: preparing Japan for an ageing and declining population ..................................................................................... 11 The fragile labour market situation of older people ....................................... 11 Recent reforms.............................................................................................. 12 Areas for further reform................................................................................ 14 RÉSUMÉ ET PRINCIPALES RECOMMANDATIONS ..................................... 25 INTRODUCTION............................................................................................ 41 Chapter 1. THE CHALLENGE AHEAD ......................................................... 43 1. 2. 3.

The demographic challenge ................................................................ 43 Potential economic and social impacts................................................ 47 Key issue: employment prospects for older workers ........................... 51

Chapter 2. THE CURRENT LABOUR MARKET SITUATION ..................... 53 1. 2.

Recent economic developments and labour force participation........... 53 The employment situation of older people.......................................... 57 A. Lifetime employment and job security under strain....................... 61 3. Unemployment among older people ................................................... 69 4. Inactivity among older people and potential labour supply ................. 71 Chapter 3. STRIKING THE RIGHT BALANCE: INCOME SUPPORT FOR OLDER PEOPLE AND WORK INCENTIVES ...................................... 73 1.

An overview of Japan’s pension system ............................................. 73 The three-tier scheme.................................................................... 73 Pensionable age ............................................................................ 74 Beneficiaries ................................................................................. 75 Financial sustainability ................................................................. 75 2. The impact of the pension system on retirement decisions.................. 77 A. Effective and official age of retirement ......................................... 79 B. Replacement rates and participation rates...................................... 80 A. B. C. D.


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C. D. E. 3. A. B. C. D. E. 4. A. B. C. D.

Combining work with an old-age pension ..................................... 82 Suspended EP benefit and labour supply....................................... 83 Suspended EP benefit and labour demand ..................................... 86 The impact of other welfare benefits on work incentives ................... 87 Early retirement schemes .............................................................. 87 Unemployment benefits ................................................................ 88 Employment Continuation Benefit for the Aged (ECB) ................ 89 The combined effect of pensions and ECB on total income........... 91 Disability pension ......................................................................... 94 Other areas of concern........................................................................ 94 Allocation of net social transfers ................................................... 94 Level of the NP and public assistance ........................................... 95 Pension rights of women ............................................................... 96 Improving the portability and security of corporate pensions ........ 97

Chapter 4. ENCOURAGING EMPLOYERS TO RETAIN OLDER WORKERS LONGER ....................................................................... 99 1. A. B. C. D. 2. A. B. C. D. E. 3. A. B. C. D. E. F. G.

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Employment practices of firms........................................................... 99 Mandatory retirement.................................................................... 99 “Continued employment” until age 65 ........................................ 101 The smaller, the more older-worker friendly ............................... 101 Lifetime employment is becoming less prominent ...................... 102 Possible factors behind low retention rates ....................................... 103 Seniority wages........................................................................... 103 Wage declines at older ages ........................................................ 107 Other changes in employment arrangements after mandatory retirement.................................................................................... 108 Employment protection – obstacle or security? ........................... 109 The presence of age discrimination ............................................. 111 Measures to enhance employment prospects for older workers......... 111 Establishing more clearly how policy objectives will be achieved and the likely costs and benefits ................................... 112 Restricting further the use of mandatory retirement .................. 113 Reforming employment protection rules ..................................... 114 Reforming the seniority wage system.......................................... 116 Tackling age discrimination ........................................................ 117 Other measures to support retention and hiring of older workers .......................................................................... 120 Disseminating best practice......................................................... 120


Chapter 5. BETTER ACCESS TO BETTER JOBS ....................................... 123 1. A. B. C. D. 2. A. 3. A. B. C. D. E.

Employability and training ............................................................... 123 Improving skills .......................................................................... 123 Traditional firm-based training system........................................ 125 Policy initiatives for “self-training”............................................. 125 Incidence of training ................................................................... 126 Employment services ....................................................................... 131 Strengthening the Public Employment Service............................ 131 Flexible and diverse work arrangements........................................... 132 Encouraging diverse participation in society ............................... 132 Promoting self-employed ............................................................ 133 Providing better arrangements for non-regular workers............... 134 Reducing work hours .................................................................. 136 Improving the employment prospects of female older workers .............................................................................. 138

BIBLIOGRAPHY .......................................................................................... 140

List of Boxes Box 1.1. Box 4.1. Box 4.2. Box 4.3. Box 5.1.

Box 5.2.

Population projections............................................................... 45 Some examples of employment practices for continued employment ............................................................................ 108 Policy measures to assist employers ........................................ 118 Wage subsidy schemes for older workers in selected OECD countries ...................................................................... 121 The International Adult Literacy Survey (IALS) and the Japanese Survey on Education and Training in the Private Sector (JSET) .............................................................. 128 Special offices to support older job seekers or older workers .......................................................................... 132

List of Figures Figure 1.1. Figure 1.2. Figure 1.3. Figure 1.4. Figure 1.5. Figure 1.6.

Life expectancy at birth and fertility rates in Japan, 1970-2050 ................................................................................. 44 Demographic dependency ratios, 2000-2050............................. 46 Labour force growth, 1950-2050 ............................................... 48 Labour force growth in OECD countries, 1980-2050 ................ 50 Average effective retirement age in Japan, 1950-2002 .............. 52 Japan's ageing labour force over the next 50 years .................... 52


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Figure 2.1. Figure 2.2. Figure 2.3. Figure 2.4. Figure 2.5. Figure 2.6. Figure 2.7. Figure 2.8. Figure 2.9. Figure 2.10. Figure 2.11. Figure 3.1. Figure 3.2. Figure 3.3. Figure 3.4. Figure 3.5. Figure 3.6. Figure 3.7. Figure 3.8. Figure 3.9. Figure 3.10. Figure 4.1. Figure 4.2. Figure 4.3.

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Participation rates by age and gender in Japan, 1970-2002........ 54 Participation rates by age and gender in OECD countries, 2002 .......................................................................................... 56 Participation rates for older people (50-64) in Japan by level of educational attainment, 2001 ................................... 57 Employment share of older workers, 2001, and overall job growth by industry, 1990-2000............................................ 60 Employment share of older workers, 2001, and overall job growth by occupation, 1990-2000 ....................................... 61 Job tenure by age, gender and firm size in Japan, 2002 ............. 62 Job tenure by age and gender in selected OECD countries, 2000 .......................................................................................... 63 Retention rates by age and gender in selected OECD countries, 1995-2000................................................................. 65 Retention rates by age and gender in Japan, 1980-2000............. 66 Hiring and separation rates for older workers versus all workers, 1991-2001.............................................................. 67 Unemployment rates by age and gender in Japan, 1970-2002 ................................................................................. 69 A summary of Japan’s pension system ...................................... 74 Public old-age pension expenditures in OECD countries, 2000-2050 ................................................................................. 76 Retirement rate by age in Japan and the United States, 2000-2001 ................................................................................. 78 Effective and official age of retirement in OECD countries, 1997-2002 ................................................................................. 79 Replacement rates and participation rates for older men in OECD countries, 2000 .......................................................... 81 Combining work and pensions in Japan, 1992-2000.................. 83 Employees entitled to EP in Japan by age and gender, FY2000 ..................................................................................... 84 Wage distribution of employees entitled to EP and proportion whose pension was fully suspended, FY2000............................ 85 Change in employment rates for older people (50-64) versus change in youth unemployment rates (15-24), 1992-2002 ......... 88 Total income of a worker from earnings, pension benefits and the Earnings Continuation Benefit (ECB) ........................... 92 Firms employing all applicants up to age 65............................ 102 Age-earnings profiles in selected countries ............................. 105 Age-earnings profiles by level of education in selected countries .................................................................... 106


Figure 5.1. Figure 5.2.

The rise in education level of older workers ............................ 124 Incidence of job-related training for employees by age in OECD countries .................................................................. 129

List of Tables Table 1.1. Table 2.1.

Labour force growth under various scenarios ............................ 50 Japanese older workers by selected job characteristics, 2002 .......................................................................................... 58 Table 2.2. Japanese older workers by selected workplace characteristics, 2002 .......................................................................................... 59 Table 2.3. Job separations in Japan by reason, 2001................................... 68 Table 2.4. Unemployment in Japan by reason, 2002 .................................. 70 Table 2.5. Incidence of long-term unemployment in Japan by age and gender, 2002 ....................................................................... 71 Table 2.6. Inactivity and the desire for work in Japan, 2002....................... 72 Table 3.1. Beneficiaries of old-age pensions by type of pension, 2000 .......................................................................................... 75 Table 3.2. Expenditure on Employment Continuation Benefit and number of beneficiaries, 1996-2001.................................... 90 Table 3.3. Wage and net income of male workers aged 60-64.................... 93 Table 3.4. Average pension and income of older couples for different combinations of work history, 1997 .......................................... 96 Table 4.1. Firms with a mandatory retirement system .............................. 100 Table 4.2. The strictness of employment protection for regular employment in OECD countries in late 1990s ......................... 110 Table 4.3. Unemployed in Japan by age and reason for not finding a job, 2001 .............................................................................. 111 Table 5.1. Recipients of public assistance for training by age group, FY2001 ................................................................................................ 126 Table 5.2. Participation in job-related training by employees................... 129 Table 5.3. Incidence and intensity of Off-JT ............................................ 130 Table 5.4. Weekly hours of work for older workers aged 50 or over in selected OECD countries, 2001........................................... 137 Table 5.5. Weekly hours of work in Japan by age and gender, 2001 ........ 138


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EXECUTIVE SUMMARY

The challenge ahead: preparing Japan for an ageing and declining population Japan already has one of the oldest populations among OECD countries, and further rapid ageing of its population is projected over the coming years. By 2050, more than one in three Japanese are likely to be over the age of 65 compared with around one in six in 2000. Not surprisingly, the average age of the workforce will also increase significantly. For instance, the proportion of the labour force aged 50 and over is likely to rise from 36% in 2000 to 43% in 2030. Japan’s working-age population (aged 20-64) has already begun to contract and its total population is likely to reach a peak within the next few years followed by a substantial decline over the next half century. Inevitably, Japan’s labour force will also undergo a steep decline over the next 50 years. This, in turn, will lower economic growth at the same time as public expenditures on pensions and health are likely to be rising as a share of GDP. Moreover, declines in labour supply could lead to severe labour shortages. However, the scale and timing of these developments will depend crucially on future trends in the mobilisation of Japan’s potential labour supply. Maintaining high participation rates among the growing ranks of older people and improving job quality will be of particular importance. Therefore, appropriate reforms are required now to meet these challenges. The fragile labour market situation of older people Participation and employment rates for older people in Japan are high by international standards. The average retirement age at which older workers effectively stop working is estimated to be just under 70 for men (down slightly from around 71 in the early 1990s) and 66 for women – much older ages than in most other OECD countries. Nevertheless, older people in Japan are increasingly facing a number of difficulties in the labour market, particularly as a result of stagnant economic growth over the past decade. AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

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First, job insecurity is on the rise, especially for workers aged 60 and over. This corresponds to the age of mandatory retirement that is set in the vast majority of firms. Separation rates have risen significantly over the 1990s for workers aged 60-64 in contrast to little change for prime-age workers. While many older workers are subsequently re-employed following mandatory retirement – often within the same firm or with a subsidiary or supplier firm – their new jobs often involve a substantial cut in wages and irregular or nonstandard forms of employment. For instance, one in five employees (in the nonagricultural sector) aged 60-64 works as a daily or temporary worker compared with only one in ten employees in the prime-age group. Second, unemployment has risen substantially for the older labour force. In 2002, the unemployment rate for men aged 60-64 was 9.7%, or nearly twice as high as the national rate of 5.4%. The incidence of long-term unemployment has also risen for the older unemployed. In 2002, over 36% of unemployed persons aged 50 and over had been unemployed for more than a year compared with 30% for all unemployed persons. Third, working conditions are not well adapted to the needs of older workers. Despite some signs of a significant decrease over the past decade, annual and weekly hours of work in Japan are still high by international standards. Long working hours, as well as shift work, may be particularly onerous for older workers. One dramatic indication of inadequate working conditions has been the rise in suicides linked to work pressures and stress, although other factors such as the depressed economic climate have also played a role. Recent reforms Japan deserves praise for giving priority at a very early stage to developing a range of labour market policy measures to cope with its ageing population. In particular, the Law for the Stabilisation of Employment of Older Workers (originally introduced under another name in 1971) provides a comprehensive framework to promote better employment opportunities for older workers. It also sets out the respective responsibilities of the government and social partners. Successive reforms of this law have resulted in a rise in the minimum legal age of mandatory retirement that can be set by firms from 55 to 60. Guidelines have also been adopted to extend employment to the age of 65. A number of the reforms to improve the financial sustainability of the National Pension System, which were decided in 1994 and 2000, will have a positive impact on incentives to remain in work longer. A progressive increase will take place in the minimum age of entitlement for the old-age employees’ 12


pension (which, for employees aged 60-64, is called the “specially-provided old-age employees’ pension”). The earliest age at which the flat-rate portion can be received is being raised progressively from 60 to 65 over the period 2001-2013 for men and 2006-2018 for women. In the 2000 reform, it was decided that the minimum age for receiving the earnings-related portion would also be raised from 60 to 65, but over the period 2013-2025 for men and 2018-2030 for women. This rise in the minimum age for entitlement to the public pension is expected to have a large positive impact, albeit in the long term, on work incentives for persons aged 60-64. Importantly, the government has sought to improve training opportunities and thus reduce the risk that skills are eroded with age. In particular, the government has been actively promoting “self-training” and, to this end, has introduced the Education and Training Benefit. The purpose of this benefit is to directly assist individuals to take designated courses by covering part of their training fees. However, both the ceiling for the amount of benefits that can be received and the subsidy rate were cut back due to budgetary constraints in May 2003. The government has been also promoting “life-long training”, including assistance with career development and counselling and the introduction of a system of competence assessment. To tackle age discrimination, a new provision in the Employment Measures Law became effective in October 2001 which urged employers to make efforts to give equal opportunities regardless of age when recruiting or hiring. In addition, based on the new provision, the Guidelines for Employers to Offer Equal Opportunities to Job Seekers Regardless of Age were introduced. These guidelines specify the exceptional cases in which firms can set age limits when making job offers. This is the first explicit legislative attempt that has been taken by Japan to tackle age discrimination. Japan also deserves praise for not having introduced any early retirement programmes unlike many OECD countries either during previous economic downturns or in response to the current period of economic stagnation and rising unemployment. It also faces a much lower risk than in some other OECD countries of either its unemployment or disability benefit systems becoming a pathway into early retirement. Under the unemployment benefit scheme, the maximum duration of benefits is strictly limited and has been shortened for the older unemployed (especially in the case of voluntary job quits) as a result of recent reforms. Inflows into the disability benefits system are quite low, even for the older age groups, no doubt because of strict eligibility rules based on a medical definition of disability and because benefits are not overly generous.


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Areas for further reform While Japan has made considerable efforts to improve labour market prospects for older workers, there is still scope for further action in the areas of income-support arrangements, firm employment and pay practices and the employability and working conditions of older workers. Reforming pensions and income-support arrangements The old-age pension system Work incentives may have been weakened for some older people as a result of the earnings test for working pensioners age 65-69 that was introduced as part of the 2000 pension reform (formerly only pensioners aged 60-64 were subject to an earnings test). While, the Japanese earnings test has been carefully designed to avoid causing significant disincentives to work, it may not prove to be fully successful in this regard. First, it may encourage older workers to switch from full-time to part-time work, since part-timers who work less than three-quarters of regular working hours or days are not subject to the earnings test. This trend has already been apparent for persons aged 60-64 whose pensions were subject to an earnings test prior to the 2000 reform. According to a special tabulation of the 2000 Survey on Employment Conditions of Older Persons, around 20% of this group declared that they chose not to work or reduced their work hours to avoid a suspension of their pension. Second, through the operation of the earnings test, pension benefits may end up providing an implicit wage subsidy to employers. In fact, it would appear that more than 40% of firms that hire working pensioners aged 60-64 are making some special arrangements about wages and working hours in order to reduce the possible loss of pension benefits for these workers. Of course, the purpose of the earnings test is to limit pension payments in the case of older people who can and do continue to work, and thereby limit the overall increase in pension expenditure as the population ages. However, this objective should be carefully balanced against the need to fully mobilise the labour supply of older workers in order to boost economic growth and to cope with future labour shortages. The treatment of dependent spouses under Japan’s pension system may also be distorting the labour supply choices of women. Dependent wives (and dependent husbands) including those working part-time are covered by the oldage employees’ pension without paying their own premiums. This arrangement 14


is unfair for working wives who pay their own premiums. More importantly, given that Japan is facing a declining labour force, it also undermines work incentives for women, especially to take up or remain in full-time jobs. Moreover, Japan’s pension system fails to adequately protect all older women without a working career (i.e. without any insured period for the employees’ pension) from falling into poverty since divorced older women are not entitled to the survivor’s pension but only to their own old-age basic pension. Employment Continuation Benefit The Employment Continuation Benefit for the Aged was introduced in 1995 under the employment insurance system in order to increase the incentives for older persons to continue working rather than take up unemployment benefits. This in-work benefit compensates workers aged 60-64 who experience a wage reduction of more than 25% after mandatory retirement. The government regards this benefit to be a very important tool for increasing the work incentives of older persons. However, as earnings increase, the phase out of this benefit implies marginal effective tax rates on income of 65%, if the new wage falls in the range of 61-75% of the former wage at the age of 60. This may encourage some older workers to take up or remain in lower-paid jobs and thus may be distorting labour supply decisions. In addition, the benefit may work as a kind of wage subsidy to employers. In theory, it allows employers to reduce the wage level of their older workers by up to the maximum amount of the benefit without lowering the overall income from work of older workers. Thus, this benefit faces the same problem as other wage subsidies, such as stigmatisation (by suggesting that all older workers require protection), substitution effects (i.e. older persons may be hired at the cost of other age groups) and large deadweight loss (i.e. most of the subsidised workers would have been hired anyway). On top of that, the benefit is not targeted at the most disadvantaged groups among older persons, such as the unskilled long-term unemployed. Instead, those older workers who have benefited the most from lifetime employment practices and the seniority wage system may gain the most from the benefit. The benefit undoubtedly enhances the ability of firms to hire or rehire older workers at lower wages that may be more in line with the actual productivity of these workers. Nevertheless, in the longer run, a first-best solution may be a change in Japan’s seniority wage system (see below). More generally, in view of the situation facing the older unemployed, it is important to consider whether the Employment Continuation Benefit is well targeted at the most disadvantaged groups.


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Recommendations for reform Further reform in the area of income-support arrangement may be necessary as follows: •

Reconsider specific provisions of the pension system. Reform of the Japanese old-age pension system may be required to remove disincentives for older people to remain longer in full-time work, to extend pension coverage to part-time workers and to make the system more transparent. The earnings test for working pensioners aged 60-69 is especially problematic. For example, providing an option of a deferred pension for older workers of pensionable age may be a way to improve work incentives.

•

Review pension rights for women. A more individualised system of pension rights would neutralise work disincentives for women and could eventually help narrow the gender gap in employment rates for older people. Pension rights could be granted to women for longer periods of absence from the workforce because of childbirth or caring for young children or elderly relatives. In the short-term, the protection of pension rights for divorcees should be strengthened.

•

Review the system of the Employment Continuation Benefit. The recent reform which tightened entitlement to the benefit and lowered the subsidy rate should help alleviate its potential to distort the labour supply decisions of older workers. Nevertheless, the operation of this benefit should be carefully reviewed and evaluated, especially in the context of the operation of the earnings test for working pensioners aged 60-64.

Changing employer attitudes and improving job retention The reforms to Japan’s pension and income-support system mentioned above should help improve incentives for older people to remain in work longer. However, these supply-side measures will not be enough, action is also needed on the demand-side. The practice of mandatory retirement Currently, firms are entitled to set a mandatory age of retirement as long as it is not below the age of 60, even though the minimum age of retirement under the old-age employees’ pension scheme is being progressively raised from 60 to 65. And, in fact, most firms in Japan have a mandatory age of retirement and it is set at the legal minimum of 60 years of age.

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It has been suggested that the practice of mandatory retirement should be banned since it gives rise to large job turnover for older workers and may not only result in unemployment but in a loss of (firm-specific) human capital. However, mandatory retirement is tightly linked in with Japan’s seniority wage system and strict employment protection rules and if it were to be abolished, firms would potentially suffer from a double burden: high firing costs and high wage costs. The role of seniority wages The wage system in Japan can still be characterised as being predominantly based on seniority, although there is some evidence that firms have added recently other factors such as performance evaluation. The ageearnings profiles show that wages for men rise quite steeply up to the age of 50-54, but start to decline thereafter, with a sharp drop occurring between the age groups 55-59 and 60-64. This suggests that many of the new jobs that Japanese men find after mandatory retirement entail a large wage cut. In response to the government policy direction to secure employment up to age 65, firms are introducing a system of “employment extension” which allows workers to remain in the firm or a subsidiary or supplier firm after mandatory retirement. However, while there appears to be flexibility in wages for workers around 60 years of age, firms have been reluctant to reform their wage systems more extensively at younger ages. The role of employment protection Japanese firms are in principle guaranteed dismissal rights under the Civil Code, and the Labour Standards Law only requires advance notice or dismissal pay. However, dismissal rights have become severely restricted by case law. Thus, in practice, employment protection of regular workers is high by international standards. Any loosening of employment protection would have two opposite effects: it would lower job security for employed older workers, but at the same time it should increase the chance of re-employment for the older unemployed. Of course, any rise in the hiring rate for older workers would most likely be very limited unless action is also taken to tackle age discrimination, reduce high seniority wages, improve the skills of older workers and strengthen labour demand more generally. Reducing the employment protection of regular workers could also lead to a better balance in the treatment between regular workers and non-regular workers. It would facilitate the conversion of regular contracts into non-regular ones. Such a shift would be beneficial to older workers especially after age 60, who tend to prefer flexible or shorter hours of work.


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A reconsideration of employment protection rules could also have an impact on employees’ attitude towards the wage system and thus could, somewhat paradoxically, improve employment prospects for older workers. If workers face a higher risk of being forced to leave the firm before recouping their deferred wages, then a seniority system becomes less attractive. Tackling age discrimination Tackling age discrimination is complex in a country like Japan where considerations of age are so deeply embedded in its standard employment practices and culture. Some measures have been taken, as already mentioned, such as the government’s Guidelines to discourage firms from setting age limits in job offers. However, the Guidelines allow for a wide range of exemptions. The result is that most firms in practice are permitted to set age limits for job offers. For example, firms with a mandatory retirement system may legitimately set an age limit for recruitment on the ground that substantial training is required in the post. Or firms with a seniority wage system are often exempted, if they cannot hire an older person at a lower wage because of their rules of employment. Better targeting of wage subsidies Japan has wage subsidies for hiring older workers. Subsidies that are targeted broadly by age may have a stigmatising effect and not be very effective because of substitution effects and deadweight loss. Generally, wage subsidies are likely to be more effective when they are more strictly targeted. Systematic and rigorous evaluations of the effectiveness of these subsidies should be carried out and the eligibility rules and generosity of these subsidies should be made flexible in response to changing labour market conditions. Recommendations for reform There is no single measure that would dramatically increase retention or hiring rates for older workers, especially in view of the current morose economic climate in Japan. Moreover, many of the barriers to firm’s retaining or hiring older workers are deeply embedded in employer practices concerning human resource management and wage determination. In particular, the following conditions would appear to be necessary as part of any package of measures to reform Japan’s seniority wage system, employment protection rules and mandatory retirement practices and to tackle age discrimination: i) competence and performance, instead of age, should become the main factors for personnel decisions and determining wages, based on a well-developed system of job specification and fair personnel evaluation; ii) due standards for 18


dismissals should become more transparent and less onerous; and iii) there should be more flexible employment arrangements for older workers. Under these conditions, the following measures should be envisaged: •

Further restrict the use of mandatory retirement. One approach would be to progressively raise the minimum age for mandatory retirement – in line with the increase in the minimum age for receiving the old-age pension. Another one would be to abolish the mandatory retirement system. The latter would be a more difficult choice in the current situation with strong employment protection and seniority wages. Any moves in this direction would require adequate consultation among social partners and advance notice – so that other employment and pay practices could be adjusted accordingly.

•

Encourage reform of the seniority wage system. The government should support the efforts of the social partners to reform wage-setting practices based on seniority by developing guidelines for enhancing the role of competence and performance in pay determination. It could also set an example by applying these guidelines in the civil service. By restricting the use of mandatory retirement, as suggested above, this would further encourage the social partners to change the wage system.

•

Review employment protection legislation. Legislation could be introduced to clarify and simplify the obligations of employers and the rights of their employees concerning lay-offs and dismissals. In June 2003, the Labour Standard Law was revised to put into statutory form the basic idea of court rulings. However it is not clear this represents much progress in terms of clarity of dismissal requirements. It is important that any such moves in this area should be done in conjunction with strengthening measures to tackle age discrimination in both hiring and firing, improving the employability of older workers (see below) and establishing a better social security net in general.

•

Rationalise further the system of wage subsidies for older workers. Japan’s system of wage subsidies should be carefully evaluated to determine their effectiveness and whether they could be better targeted to help the more disadvantaged groups among older people.

•

Strengthen measures to combat age discrimination. The government’s attempts to combat age discrimination should be pursued. This would give a clear signal to employers and to society as a whole that age discrimination should not be tolerated. At a minimum, the current list of exemptions from using age limits in recruiting should be reviewed and reduced.


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Improving the employability of older workers Overall participation rates of Japanese older workers in training activities appear to be relatively high by international standards and not much lower than for younger workers. However, women engage in much less training than men and this gap is larger than in other OECD countries. In terms of training intensity, measured by either hours of training or employer training costs, Japan also compares somewhat less favourably than some other OECD countries. Finally, participation of older workers in the Education and Training Benefit is rather low. The reason could be the general unwillingness of older persons to undergo training, or the fact that the content or curriculum of designated courses may not be very attractive to them. If the latter is the case, the course designation criteria should be reviewed with a view to encouraging greater takeup of training opportunities by older people. Thus, there would appear to be scope to deepen and broaden the delivery of training opportunities. Given the relatively high unemployment rate among older workers, it is essential that they have access to good employment services. There has been an impressive expansion of the Public Employment Service (PES) for older persons in a short space of time. This has included the setting up of special offices to deal with older jobseekers or older workers still in employment. These services have special officers, who provide placement services and career guidance specifically to older workers, and who give guidance to employers concerning continued employment. This direction of improving the services and resources of the PES should be pursued. More diversified or flexible work forms will be necessary to meet an increasingly wide range of work preferences. At the same time, however, the polarisation in the status of regular and non-regular workers should be mitigated. Regular workers enjoy high job security and good social security coverage and earnings prospects but are restricted in their work choices (e.g. hours and place of work, job tasks, etc.). Irregular workers face low job security, low wages and less access to social security, while in certain cases they have more freedom of work choice. The shares of older part-timers are already high (about 30% and 50%, respectively for men and women aged 60 or over) and has been increasing. Arranging better working conditions for nonregular workers would be of particular importance to older persons. For example, some older men who are currently not working might take up jobs if more part-time job opportunities were available and if better working conditions were arranged for these jobs. Furthermore, long working hours could be an obstacle to older workers continuing to work full-time.

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Finally, some older women face special problems requiring specific measures to help them either retain or find jobs. Moreover, older women, in particular single older women, tend to face a higher risk of poverty. There is no policy specifically intended for older working women. In addition, some measures such as the Employment Continuation Benefit seem to be more targeted at older men rather than older women, since fewer women workers experience mandatory retirement or face as large a wage cut as their male counterparts. Recommendations for reform A number of measures may be required to improve the employability and working conditions of older workers. These include: •

Strengthen and expand training opportunities for mid-career and older workers. For adult and older workers, this may imply boosting the number of well-designed modular courses of vocational training which build upon the existing qualifications of these workers, as has occurred in Australia over the past 15-20 years. This may encourage greater take-up and may generate higher returns to training than in the case of longer courses. The designated courses of the Education and Training benefit should be reconsidered to improve take up among older people.

•

Continue to improve the quality of the PES. The quality of placement services and career consultation services needs to be strengthened further. The recent expansion of the PES should be pursued further but subject to an assessment of its efficiency. The possibilities for some sub-contracting out to private and non-profit employment agencies of placement services for older jobseekers with special needs should be considered, building on the experience of the Silver Human Resource Centres.

•

Enhance financial incentives for the re-employment of older job seekers. Other OECD countries have introduced in-work benefits and earnings disregards for unemployed people. The benefits entail less danger of deadweight loss than other programme given the low re-employment probability of unemployed older workers at present.

•

Provide better arrangements for non-regular forms of work. Non-regular workers should be given better access to the social security system and their wages should be brought in line with those of regular workers.

•

Lower working hours and improve working conditions. The government should also continue to push for lower working hours, perhaps by setting


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targets for reductions in work hours for older workers in particular, as well as encouraging best practice with respect to improving working conditions more generally for older workers. Other areas for reform Establish more clearly how policy objectives will be achieved and the likely costs and benefits The government has been promoting the goals of “Employment until 65” and “Age-free employment”. To date, most of its efforts appear to have been concentrated on achieving “Employment until 65” through a comprehensive package of measures targeted at older persons, including wage subsidies. While these measures are certainly steps in the right direction in terms of improving retention rates for workers aged 60-64 – who currently face considerable job insecurity – they could lead to some deterioration in labour market outcomes for workers aged 65 and over relative to workers in their early 60s. For instance, when measures were taken to raise the standard age of mandatory retirement to 60, the employment situation of the age group 60-64 worsened significantly over the 1990s compared to that of the age group 55-59. At the same time, the government has declared “Age-free employment” as its ultimate goal. However, it is not apparent that a clear message is being provided about the extensive change that will be required in human resource management practices to achieve this goal and the difficult policy choices that may be involved. For example, it may be necessary to expand the role of the external labour market to improve hiring opportunities for older worker but this may only be possible at the cost of some weakening of job security for regular employees. Therefore, the policy measures required to achieve age-free employment and their likely impact on labour market outcomes for older workers should be more fully articulated. Systematic evaluation of policy measures and programmes is vital Japanese policy-makers are to be praised for the rapidity with which they have formulated and delivered new policy measures to tackle the emerging labour market problems confronting older people. The implementation of these measures needs, however, to be combined with a rigorous and systematic programme of evaluation in order to learn what works and what does not and to incorporate these lessons into policy design and implementation. It is also important that adequate statistics are available to determine the most important issues for policy and in order to evaluate policy outcomes. 22


Japanese labour market statistics are generally of high quality. Nevertheless, there are a number of areas where improvements could be made to better capture the labour market situation of older workers and to improve data access, including introducing a longitudinal survey to track work and retirement decisions and a special survey of working conditions. Strengthen family-friendly employment policies In terms of mobilising labour supply more generally, there is scope to raise labour force participation rates for prime-age women which may, in turn, lead to higher participation rates for these women at older ages than experienced by the current cohorts of older women. Labour force participation rates for both prime-age and older women are significantly lower than for men. The gap is much larger than in many other OECD countries. While pension reform can play a part, there is also a need to implement family-friendly employment policies to strengthen the ability and willingness of Japanese women to build up longer working careers. Continue to pursue structural reform Finally, measures that lower barriers to job creation and stimulate employment growth more generally are likely to be of special benefit to older workers. Therefore, it is important that Japan continues to push forward with wide-ranging structural reforms. In the context of high and rising youth unemployment, these reforms may also help to allay concerns that measures which encourage older people to remain in work longer may be at the expense of worse labour market outcomes for youth. Across OECD countries as a whole, there is in fact a positive correlation between employment outcomes of older and younger people. Indeed, countries which experienced the smallest decline in employment rates for older people also tended to experience the smallest decline in youth employment rates and the smallest rise in youth unemployment. Nevertheless, by generating more jobs at all ages through structural reform, this may help ensure that there is continued widespread support in Japan for the necessary measures to be taken to encourage older people to remain active. Ensuring that Japan maintains its high participation rates for older people will also ensure that it is better placed to cope with the challenges it faces because of rapid population ageing.


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RÉSUMÉ ET PRINCIPALES RECOMMANDATIONS

Le défi de l’avenir : préparer le Japon au vieillissement et à la diminution de sa population Le Japon fait déjà partie des pays de l’OCDE où la population est la plus âgée et l’on prévoit une nouvelle accélération du vieillissement démographique dans les prochaines années. D’ici à 2050, il est probable que plus d’un Japonais sur trois sera âgé de plus de 65 ans, contre un sur six en 2000. Comme il faut s’y attendre, l’âge moyen de la population active va aussi fortement augmenter. Ainsi, la proportion d’actifs âgés de 50 ans et plus devrait passer de 36 % en 2000 à 43 % en 2030. La population d’âge actif du Japon (ayant entre 20 et 64 ans) a déjà commencé à se contracter et il est probable que la population totale du pays passera par un sommet dans les quelques années à venir pour ensuite fortement diminuer au cours des 50 prochaines années. Inévitablement, la population active du Japon accusera elle aussi une forte diminution sur la même période. Ce facteur freinera à son tour la croissance économique tandis que dans le même temps les dépenses publiques consacrées aux pensions et à la santé représenteront vraisemblablement une part croissante du PIB. En outre, la contraction de l’offre de travail pourrait entraîner de graves pénuries de main-d’œuvre. Toutefois, l’ampleur de ces évolutions et le moment où elles surviendront dépondront avant tout de la manière dont le Japon mobilisera à l’avenir ses ressources potentielles de main-d’œuvre. Le maintien de taux d’activité élevés pour la masse croissante des travailleurs âgés et l’amélioration de la qualité des emplois qu’ils occupent revêtiront une importance particulière. Des réformes appropriées sont donc requises dès à présent pour relever ces défis. La fragilité de la situation des travailleurs âgés sur le marché du travail Les taux d’activité et d’emploi des travailleurs âgés au Japon sont élevés par rapport à ceux d’autres pays. On estime que l’âge moyen de départ à la retraite, c’est-à-dire celui auquel les travailleurs âgés cessent effectivement leur activité, est d’un peu moins de 70 ans pour les hommes (chiffre en légère baisse AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

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par rapport à celui du début des années 1990 qui était d’environ 71 ans) et de 66 ans pour les femmes – soit des âges beaucoup plus avancés que dans la plupart des autres pays de l’OCDE. Les travailleurs âgés japonais se heurtent néanmoins de plus en plus à un certain nombre de difficultés sur le marché du travail, en raison notamment de la stagnation de l’activité économique pendant la dernière décennie. En premier lieu, la précarité de l’emploi va en s’accentuant, surtout pour les travailleurs âgés de 60 ans et plus. Cet âge est l’âge de la retraite obligatoire fixé par la grande majorité des entreprises. Les taux de cessation d’emploi ont sensiblement augmenté au cours des années 1990 pour les travailleurs âgés de 60 à 64 ans alors que pour les travailleurs d’âge très actif, ils ont peu changé. De nombreux travailleurs âgés sont réembauchés après leur départ à la retraite – dans bien des cas dans la même entreprise, une de ses filiales ou un de ses fournisseurs – mais souvent le salaire qu’ils perçoivent dans leur nouvel emploi est considérablement réduit et ils occupent des emplois irréguliers ou atypiques. Par exemple, un salarié sur cinq (dans le secteur non agricole) âgé de 60 à 64 ans est employé comme journalier ou travailleur temporaire contre seulement un sur dix dans le groupe des travailleurs d’âge très actif. En second lieu, le chômage a fortement progressé pour le groupe des travailleurs âgés. En 2002, le taux de chômage des hommes âgés de 60 à 64 ans était de 9.7 %, soit pratiquement le double du taux national qui s’établissait à 5.4 %. L’incidence du chômage de longue durée a aussi augmenté pour les chômeurs âgés. En 2002, plus de 36 % des chômeurs âgés de 50 ans et plus étaient sans emploi depuis plus d’un an contre un peu plus de 30 % pour l’ensemble des chômeurs. En troisième lieu, les conditions de travail ne sont pas bien adaptées aux besoins des travailleurs âgés. Bien que certains signes montrent qu’elle a beaucoup diminué au cours de la dernière décennie, la durée annuelle et hebdomadaire du travail au Japon reste élevée comparativement à d’autres pays. Une longue durée de travail et le travail posté peuvent être particulièrement astreignants pour les travailleurs âgés. L’augmentation du nombre de suicides liés aux tensions et au stress de la vie professionnelle témoigne de façon dramatique de l’inadéquation des conditions de travail, bien que d’autres facteurs, tels que la mauvaise conjoncture économique, aient également joué un rôle. Les réformes récentes Le Japon a le mérite d’avoir donné très tôt la priorité à l’adoption de mesures visant le marché du travail pour faire face au vieillissement de sa 26


population. En particulier, la Loi pour la stabilisation de l’emploi des travailleurs âgés (adoptée initialement sous un autre intitulé en 1971) constitue un cadre général visant à améliorer les opportunités d’emploi des seniors. Elle fixe également les responsabilités respectives des pouvoirs publics et des partenaires sociaux. Des réformes successives de cette loi ont abouti à un relèvement de 55 ans à 60 ans de l’âge légal minimum de la retraite obligatoire qui peut être fixé par les entreprises. Des directives ont également été adoptées en vue de prolonger l’emploi jusqu’à l’âge de 65 ans. Un certain nombre de réformes du système national de pensions, qui ont été décidées en 1994 et 2000, dans le but principalement d’améliorer sa viabilité financière auront un impact positif sur les incitations à rester plus longtemps dans la vie active. L’âge minimum d’ouverture des droits à la pension de vieillesse des salariés sera progressivement relevé (dans le cas des salariés âgés de 60 à 64 ans, celle-ci est qualifiée de « pension spéciale de vieillesse des salariés »). L’âge minimum auquel le titulaire peut demander la pension de base sera progressivement relevé de 60 à 65 ans entre 2001 et 2013 pour les hommes et entre 2006 et 2018 pour les femmes. Dans le cadre de la réforme de 2000, il a été décidé que l’âge minimum de versement de la partie de la pension calculée sur les gains serait également relevé de 60 à 65 ans, mais entre 2013 et 2025 pour les hommes et entre 2018 et 2030 pour les femmes. Ce relèvement de l’âge minimum d’ouverture des droits à la retraite publique devrait avoir un impact très positif, mais à long terme, sur les incitations à travailler des personnes âgées de 60 à 64 ans. Fait important, le gouvernement s’est efforcé d’améliorer les possibilités de formation et de réduire ainsi pour les travailleurs âgés le risque de voir leurs compétences se dévaloriser avec l’âge. En particulier, le gouvernement s’est employé à promouvoir « l’autoformation » et a introduit, à cette fin, l’allocation à l’éducation et à la formation. Cette prestation est destinée à aider directement les individus à suivre certaines formations en couvrant une partie de leur coût. Toutefois, tant le plafond des prestations pouvant être perçues que le taux de prise en charge ont été réduits en raison de difficultés budgétaires en mai 2003. Le gouvernement s’est également attaché à promouvoir la « formation tout au long de la vie », notamment en fournissant une aide et des conseils pour la gestion de carrière et en introduisant un système d’évaluation des compétences. Afin de lutter contre la discrimination liée à l’âge, une nouvelle disposition a été ajoutée à la loi définissant les mesures en faveur de l’emploi ; celle-ci est entrée en vigueur en octobre 2001 et elle invite instamment les employeurs à faire tout ce qui leur est possible pour offrir des chances égales aux travailleurs au moment de leur recrutement ou de leur embauche, quel que soit leur âge. En outre, en s’appuyant sur cette nouvelle disposition, les Directives incitant les AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

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employeurs à offrir des chances égales aux demandeurs d’emploi quel que soit leur âge ont été introduites. Ces directives précisent les cas exceptionnels dans lesquels les entreprises peuvent fixer des limites d’âge dans les offres d’emploi. C’est la première fois que le Japon tente explicitement de s’attaquer au problème de la discrimination liée à l’âge par la voie législative. Le Japon a également le mérite de ne pas avoir introduit de systèmes de préretraite, contrairement à de nombreux pays de l’OCDE, soit pendant les récessions économiques précédentes, soit face à la stagnation actuelle de l’activité économique et à la hausse du chômage. Il est également beaucoup moins exposé que certains autres pays de l’OCDE au risque de voir soit son système d’indemnisation du chômage, soit son système de pensions d’invalidité devenir des voies d’accès à la retraite anticipée. Dans le cadre du système d’indemnisation du chômage, la durée maximale de versement des prestations est strictement limitée et elle a été réduite pour les chômeurs âgés (en particulier dans les cas de cessation volontaire d’activité) à la suite des réformes récentes. Le nombre de personnes admises à bénéficier d’une pension d’invalidité est très faible, même pour les groupes âgés, ce qui s’explique sans aucun doute par la rigueur des critères d’admissibilité basés sur une définition médicale de l’invalidité et par le fait que le montant de la prestation n’est pas très généreux. Domaines où une réforme plus poussée est nécessaire Bien que le Japon ait fait des efforts considérables pour améliorer les perspectives des travailleurs âgés sur le marché du travail, d’autres initiatives sont encore possibles dans les domaines de la garantie du revenu, de l’emploi et des pratiques salariales, ainsi que de l’employabilité et des conditions de travail des travailleurs âgés. La réforme des pensions et des dispositifs de garantie du revenu Le système de pensions de vieillesse Il se peut que les incitations à travailler aient été réduites pour certains travailleurs âgés par l’introduction, dans le cadre de la réforme des pensions de 2000, du plafond de gains autorisé pour les titulaires de pensions âgés de 65 à 69 ans exerçant une activité professionnelle (auparavant, seuls les titulaires de pensions âgés de 60 à 64 ans faisaient l’objet d’un plafond de gains autorisé). Bien que le plafond de gains autorisé introduit par le Japon ait été soigneusement conçu pour ne pas constituer une contre incitation majeure au travail, il risque de ne pas être pleinement efficace à cet égard.

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En premier lieu, il se peut qu’il encourage les travailleurs âgés à passer du travail à plein temps au travail à temps partiel, car les travailleurs à temps partiel dont le nombre d’heures de travail représente moins des trois quarts de la durée normale du travail ne sont pas soumis au plafond de gains autorisé. Cette tendance a déjà pu être observée pour les personnes âgées de 60 à 64 ans dont les pensions étaient assujetties à un plafond de gains autorisé avant la réforme de 2000. D’après un tableau spécial figurant dans L’enquête de 2000 sur les conditions d’emploi des travailleurs âgés, près de 20 % des personnes appartenant à ce groupe ont déclaré qu’elles avaient décidé de ne pas travailler ou avaient réduit leur durée de travail pour éviter que leur pension soit suspendue. En second lieu, en raison de l’application du plafond de gains autorisé, les prestations de retraite peuvent constituer au bout du compte une subvention salariale implicite pour les employeurs. Il semblerait, en fait, que plus de 40 % des entreprises qui recrutent des titulaires de pensions âgés de 60 à 64 ans modulent leurs salaires et leur temps de travail de manière à réduire la perte éventuelle de prestations de retraite pour ces travailleurs. Naturellement, la finalité du plafond de gains autorisé est de limiter le montant des pensions versées aux personnes âgées qui peuvent travailler et continuent à le faire et de freiner ainsi l’augmentation globale des dépenses consacrées aux retraites du fait du vieillissement de la population. Toutefois, il convient de mettre soigneusement en balance cet objectif et la nécessité de mobiliser toutes les ressources de main-d’œuvre offertes par les travailleurs âgés pour stimuler la croissance économique et faire face aux pénuries de maind’œuvre à l’avenir. Il se peut aussi que le traitement réservé aux conjoints à charge dans le cadre du système de pensions japonais fausse les choix des femmes en matière d’activité professionnelle. Les épouses à charge (et aussi les époux à charge), y compris celles qui travaillent à temps partiel, ont droit à la pension de vieillesse des salariés sans verser de cotisations. Ce dispositif n’est pas équitable pour les femmes mariées pourvues d’un emploi, qui versent elles leurs propres cotisations. Surtout, étant donné que le Japon va être confronté à une diminution de sa population active, il sape également l’efficacité des incitations à travailler offertes aux femmes, en particulier pour qu’elles prennent ou conservent un emploi à plein temps. En outre, le système de pension japonais n’offre pas à l’ensemble des femmes âgées qui n’ont pas eu d’activité salariée (autrement dit qui n’ont aucune période de cotisation donnant droit à la pension des salariés) une protection adéquate contre la pauvreté, étant donné que les femmes âgées divorcées ne peuvent toucher de pension de réversion et ont droit uniquement à leur propre pension de vieillesse de base.


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L’allocation pour la poursuite de l’activité L’allocation pour la poursuite de l’activité des travailleurs âgés a été introduite en 1995 dans le cadre de l’assurance-chômage en vue de mieux inciter les seniors à continuer à travailler plutôt que de s’inscrire au chômage. Cette prestation liée à l’exercice d’une activité est une compensation financière pour les travailleurs âgés de 60 à 64 ans dont le salaire a été réduit de plus de 25 % après la retraite obligatoire. Le gouvernement la considère comme un instrument très important pour offrir aux personnes plus âgées davantage d’incitations à travailler. Toutefois, dès lors que les gains augmentent, cette prestation est progressivement supprimée, ce qui signifie que des taux d’imposition marginaux effectifs de 65 % sont appliqués au revenu, si le nouveau salaire atteint entre 61 et 75 % du précédent salaire à l’âge de 60 ans. Ce facteur peut encourager certains travailleurs âgés à prendre ou conserver des emplois moins rémunérés et fausser ainsi les décisions professionnelles. En outre, cette prestation peut constituer une sorte de subvention salariale pour les employeurs. En théorie, elle permet à ces derniers de réduire le montant du salaire qu’ils versent à leurs travailleurs âgés d’un montant pouvant atteindre le maximum de la prestation sans diminuer le revenu total que les travailleurs âgés tirent de leur activité. Cette prestation pose donc les mêmes problèmes que les autres subventions salariales, comme un sentiment de stigmatisation des bénéficiaires (elle laisse supposer que tous les travailleurs plus âgés ont besoin d’une protection), des effets de substitution (il se peut que l’on recrute des travailleurs âgés au détriment d’autres groupes d’âge) et un important effet d’aubaine (la plupart des travailleurs bénéficiant de la prestation auraient trouvé un emploi quoi qu’il en soit). Par surcroît, cette prestation n’est pas ciblée sur les groupes les plus défavorisés parmi les travailleurs âgés, comme les chômeurs de longue durée peu qualifiés. Il se peut au contraire que ce soit les travailleurs plus âgés qui ont le plus bénéficié des pratiques d’emploi à vie et du système de rémunération à l’ancienneté à qui cette prestation sera la plus profitable. Cette prestation accroît incontestablement la capacité des entreprises à embaucher ou réembaucher des travailleurs âgés en leur versant des salaires inférieurs peut-être plus conformes à leur productivité réelle. Néanmoins, à plus long terme, la meilleure solution à envisager est peut-être une réforme du système de rémunération à l’ancienneté du Japon (voir plus loin). Plus généralement, compte tenu de la situation à laquelle les chômeurs âgés sont confrontés, il importe de se demander si l’allocation pour la poursuite de l’activité est bien ciblée sur les groupes les plus défavorisés.

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Recommandations en vue d’une réforme Une réforme plus poussée du mécanisme de garantie de revenu pourrait être nécessaire et il faudrait s’attacher à cette fin à : •

Réexaminer des dispositions spécifiques du système de pensions. Il faudra peut-être réformer le système japonais de pensions de vieillesse pour faire disparaître les facteurs qui dissuadent les travailleurs âgés de travailler plus longtemps à plein temps, pour étendre la couverture du système de pensions aux travailleurs à temps partiel et pour rendre le système plus transparent. Le plafond de gains autorisé appliqué aux titulaires d’une pension âgés de 60 à 69 ans et exerçant une activité est particulièrement problématique. On pourrait par exemple améliorer les incitations au travail en offrant aux seniors qui ont l’âge de recevoir une pension la possibilité d’une retraite différée.

•

Revoir les droits à pension des femmes. Un système de droits à pension plus individualisé neutraliserait les facteurs qui dissuadent les femmes de travailler et pourrait à terme contribuer à réduire les différences dans les taux d’emploi des hommes et des femmes âgés. Des droits à pension pourraient être accordés aux femmes pour des périodes de cessation d’activité plus longues qui ont été motivées par une maternité, l’éducation de jeunes enfants ou la prise en charge de parents âgés. A court terme, la protection des droits à pension des personnes divorcées devrait être renforcée.

•

Revoir les modalités de fonctionnement de l’allocation pour la poursuite de l’activité. La réforme récente qui a durci les conditions d’accès à cette prestation et réduit le taux de l’aide devrait contribuer à diminuer ses effets défavorables potentiels sur les décisions des travailleurs âgés de travailler. Il conviendrait néanmoins d’examiner et d’évaluer soigneusement son application, compte tenu notamment du plafond de gains autorisé appliqué aux titulaires d’une pension âgés de 60 à 64 ans et exerçant une activité.

Changer les attitudes des employeurs et améliorer le maintien dans l’emploi Les réformes du système de pensions et de garantie du revenu du Japon évoquées plus haut devraient contribuer à améliorer les incitations poussant les travailleurs âgés à rester plus longtemps dans la vie active. Toutefois, ces mesures visant l’offre ne seront pas suffisantes, et il faudra également agir sur la demande.


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La pratique de la retraite obligatoire Actuellement, les entreprises sont autorisées à fixer l’âge auquel leurs salariés doivent prendre leur retraite, à la condition que celui-ci ne soit pas inférieur à 60 ans, et cela même si l’âge minimum de départ à la retraite dans le cadre du système de pensions de vieillesse des salariés est progressivement relevé de 60 à 65 ans. D’ailleurs, l’âge de la retraite obligatoire fixé par la plupart des entreprises japonaises correspond à l’âge minimum légal de 60 ans. Il a été suggéré que la pratique de la retraite obligatoire devait être supprimée, car elle donne lieu à une importante rotation des effectifs de travailleurs âgés et elle peut être une cause non seulement de chômage, mais aussi de disparition du capital humain (celui propre à l’entreprise). Toutefois, cette pratique est étroitement liée au système de rémunération à l’ancienneté du Japon et aux règles strictes de protection de l’emploi et, si elle était abolie, les entreprises seraient potentiellement doublement pénalisées sur le plan financier : elles auraient à supporter des coûts de licenciement élevés et des coûts salariaux élevés. Le rôle des rémunérations à l’ancienneté Le système de rémunération du Japon repose toujours essentiellement sur l’ancienneté, bien que certaines indications donnent à penser que les entreprises prennent en compte depuis peu d’autres facteurs, comme l’évaluation des performances. Les courbes des rémunérations en fonction de l’âge montrent que les salaires des hommes augmentent très fortement jusqu’à l’âge de 50-54 ans, mais commencent à baisser par la suite, avec un effondrement entre les salaires du groupe des 55-59 ans et du groupe des 60-64 ans. On peut en déduire que bon nombre des nouveaux emplois que les hommes japonais occupent après la retraite obligatoire sont nettement moins rémunérés. En réponse à la directive du gouvernement visant à garantir l’emploi jusqu’à l’âge de 65 ans, les entreprises introduisent actuellement un système de « maintien dans l’emploi » qui permet aux travailleurs de continuer à travailler dans l’entreprise ou dans une de ses filiales ou un de ses fournisseurs après l’âge légal de la retraite. Toutefois, bien que les entreprises semblent faire preuve de flexibilité pour les salaires des travailleurs ayant la soixantaine, elles sont réticentes à étendre la réforme de leur système de rémunération aux groupes plus jeunes. Le rôle de la protection de l’emploi En principe, le Code civil garantit aux entreprises japonaises le droit de licencier et les seules obligations imposées par la loi sur les normes du travail sont de donner un préavis ou de verser une indemnité de licenciement. 32


Toutefois, le droit de licenciement a été considérablement restreint au fil des ans par la jurisprudence. Par conséquent, dans la pratique, la protection de l’emploi des travailleurs permanents est très grande comparativement à d’autres pays. Tout affaiblissement de la protection de l’emploi aurait deux effets opposés : il réduirait la sécurité des travailleurs âgés pourvus d’un emploi, mais dans le même temps il augmenterait les chances des chômeurs âgés d’être réembauchés. Naturellement, toute augmentation du taux d’embauche des travailleurs serait très probablement limitée, à moins que des mesures ne soient prises pour résoudre le problème de la discrimination selon l’âge, réduire les salaires élevés calculés en fonction de l’ancienneté, améliorer les compétences des travailleurs âgés et plus généralement stimuler la demande de main-d’œuvre. Le fait de réduire la protection de l’emploi des travailleurs permanents pourrait aussi se traduire par un meilleur équilibre dans le traitement des travailleurs permanents et des travailleurs temporaires. Cela faciliterait la transformation des contrats permanents en contrats temporaires, ce qui serait avantageux pour les travailleurs plus âgés qui préfèrent généralement, surtout après l’âge de 60 ans, avoir des horaires de travail flexibles ou une plus courte durée de travail. Une révision des dispositions relatives à la protection de l’emploi pourrait également avoir une incidence sur l’attitude des salariés à l’égard du système de rémunération et elle pourrait ainsi, paradoxalement, améliorer les perspectives d’emploi des travailleurs âgés. Si les travailleurs risquent davantage d’être obligés de quitter l’entreprise avant de récupérer les salaires dont le versement a été différé, le système de rémunération à l’ancienneté perd de son attrait. S’attaquer à la discrimination selon l’âge Résoudre le problème de la discrimination selon l’âge est une tâche complexe dans un pays comme le Japon, où la question de l’âge est si profondément ancrée dans les pratiques courantes en ce qui concerne l’emploi et la culture. Certaines mesures ont été prises, comme il a déjà été indiqué, par exemple avec l’adoption des Directives gouvernementales visant à dissuader les entreprises de fixer des limites d’âge dans les offres d’emploi. Toutefois, ces directives autorisent de multiples dérogations. Il en résulte que, dans la pratique, les entreprises sont autorisées à fixer des limites d’âge pour les offres d’emploi. Par exemple, les entreprises où la retraite est obligatoire à un certain âge sont autorisées par la loi à fixer une limite d’âge pour le recrutement, si elles font valoir que le poste nécessite une longue formation. Ou bien les entreprises où il existe un système de rémunération à l’ancienneté bénéficient souvent de dérogations, si elles ne peuvent recruter une personne plus âgée à un salaire inférieur en raison de leur propre règlement.


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Mieux cibler les subventions salariales Le Japon accorde des subventions salariales pour le recrutement des travailleurs âgés. Les subventions largement ciblées par groupe d’âge peuvent induire un sentiment de stigmatisation et ne pas être très efficaces en raison d’effets de substitution et d’aubaine. En règle générale, les subventions salariales gagnent en efficacité lorsqu’elles sont plus étroitement ciblées. Il conviendrait de procéder à des évaluations systématiques et rigoureuses de l’efficacité de ces subventions et d’assouplir les critères d’admissibilité, ainsi que les montants accordés en tenant compte de l’évolution de la situation du marché du travail. Recommandations en vue d’une réforme Aucune mesure ne peut à elle seule entraîner une augmentation spectaculaire des taux de maintien dans l’emploi ou d’embauche des travailleurs âgés, surtout dans la conjoncture économique actuelle qui est morose au Japon. De plus, bon nombre des obstacles au maintien dans l’emploi et à l’embauche de travailleurs âgés dans l’entreprise sont intimement liés aux pratiques des employeurs en matière de gestion des ressources humaines et de détermination des salaires. En particulier, il semblerait que les conditions énumérées ci-après devraient être réunies dans tout ensemble de mesures visant à réformer le système de rémunération à l’ancienneté du Japon, les règles de protection de l’emploi et les pratiques de retraite obligatoire ainsi qu’à résoudre le problème de la discrimination selon l’âge : i) la compétence et les performances, et non l’âge, devraient être les principaux facteurs pris en compte pour prendre des décisions sur les ressources humaines et déterminer les salaires, sur la base d’un système rigoureux de spécification des emplois et une évaluation équitable du personnel ; ii) les procédures de licenciement devraient être plus transparentes et moins astreignantes ; et iii) les modalités d’emploi des travailleurs âgés devraient être plus souples. Dans ces conditions, les mesures suivantes seraient à envisager : •

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Limiter encore le recours à la retraite obligatoire. Une solution consisterait à relever progressivement l’âge minimum de la retraite obligatoire – tout en relevant parallèlement l’âge minimum d’ouverture des droits à la pension de vieillesse. Une autre consisterait à abolir le système de retraite obligatoire. Ce dernier choix serait plus difficile à mettre en oeuvre compte tenu de la protection élevée de l’emploi et du système de rémunération à l’ancienneté qui prévalent actuellement. Toute initiative dans cette direction exigerait des consultations appropriées entre les partenaires sociaux et un préavis – de manière à AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

pouvoir ajuster en conséquence les autres pratiques en matière d’emploi et de rémunération. •

Encourager la réforme du système de rémunération à l’ancienneté. Le gouvernement devrait appuyer les efforts faits par les partenaires sociaux pour réformer les pratiques de détermination des salaires en fonction de l’ancienneté en élaborant des directives qui mettraient l’accent sur l’importance à donner aux compétences et aux performances pour fixer les salaires. Il pourrait aussi donner l’exemple en appliquant ces directives dans la fonction publique. Si le recours à la retraite obligatoire était limité, comme il est suggéré ci-dessus, les partenaires sociaux seraient davantage incités à modifier le système de rémunération.

•

Revoir la législation pour la protection de l’emploi. Une législation pourrait être introduite afin de clarifier et simplifier les obligations des employeurs et les droits de leurs salariés en matière de mises à pied et de licenciements. En juin 2003, la loi sur les normes du travail a été révisée afin que la législation reflète les jugements des tribunaux. Il n’est pas certain cependant que l’on soit parvenu à beaucoup plus de clarté dans les règles de licenciement. Il importe que ce genre d’initiative dans ce domaine aille de pair avec un renforcement des mesures destinées à lutter contre la discrimination selon l’âge, tant dans le recrutement que dans le licenciement, l’amélioration de l’employabilité des travailleurs âgés (voir plus loin) et la mise en place d’un meilleur filet de sécurité sociale en général.

•

Continuer à rationaliser le système de subventions salariales pour les travailleurs âgés. Le système japonais de subventions salariales devrait être évalué avec soin afin de déterminer s’il est efficace et s’il serait possible de mieux cibler les subventions pour aider les groupes les plus défavorisés parmi les travailleurs âgés.

•

Renforcer les mesures de lutte contre la discrimination selon l’âge. Les initiatives lancées par le gouvernement pour lutter contre la discrimination selon l’âge devraient être poursuivies. Cela permettrait d’envoyer un message clair aux employeurs et à la société dans son ensemble pour leur faire comprendre que la discrimination selon l’âge ne doit pas être tolérée. A tout le moins, la liste actuelle de dérogations à la fixation de limites d’âge dans le recrutement devrait être révisée et réduite.


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Améliorer l’employabilité des travailleurs âgés Globalement les taux de participation des travailleurs âgés japonais aux activités de formation semblent être relativement élevés comparativement à d’autres pays et ils ne sont guère inférieurs à ceux des travailleurs plus jeunes. Cependant, les femmes suivent beaucoup moins d’activités de formation que les hommes et l’écart dans ce domaine est plus important que dans d’autres pays de l’OCDE. En termes d’intensité de la formation, mesurée soit par le nombre d’heures de formation, soit par les coûts de la formation pour l’employeur, la situation est également un peu moins satisfaisante au Japon que dans d’autres pays de l’OCDE. Enfin, le nombre de travailleurs âgés qui sollicitent l’Allocation à l’éducation et à la formation est assez faible. La raison pourrait en être la réticence en général des travailleurs âgés à suivre une formation, ou bien le faible attrait que le contenu ou le programme des stages en question présente pour eux. Si c’est le cas, les critères de choix des cours de formation devraient être revus en vue d’encourager une plus grande participation des travailleurs âgés aux activités de formation. Il semble donc exister des possibilités d’enrichir et d’élargir l’offre de formation. Compte tenu du taux de chômage relativement élevé des travailleurs âgés, il est essentiel qu’ils aient accès à des services de l’emploi satisfaisants. Les prestations du Service public de l’emploi (SPE) destinées aux travailleurs âgés ont été remarquablement développées en un court laps de temps. Ainsi, des bureaux spéciaux ont été créés pour répondre aux besoins des demandeurs d’emploi âgés ou des travailleurs âgés exerçant encore une activité. Des responsables dans ces services sont spécialement chargés d’offrir des services de placement et d’orientation professionnelle aux travailleurs âgés et de conseiller les employeurs pour le maintien dans l’emploi. Il faut poursuivre cette politique d’amélioration des services et des ressources du SPE. Des formes de travail plus diversifiées ou flexibles seront nécessaires pour répondre à des préférences de plus en plus variées en matière d’emploi. Parallèlement, toutefois, il faudrait moins se polariser sur le statut des travailleurs permanents et temporaires. Les travailleurs permanents bénéficient d’une grande sécurité de l’emploi et d’une bonne couverture de sécurité sociale, ainsi que de perspectives de gains satisfaisantes, mais leurs choix au travail sont limités (par exemple en termes de durée et de lieu de travail, de tâches à accomplir, etc.). Les travailleurs irréguliers ont une faible sécurité de l’emploi, des salaires bas et moins d’accès à la sécurité sociale, alors que dans certains cas ils ont plus de liberté de choix dans leur travail. Les pourcentages de travailleurs âgés à temps partiel sont déjà élevés (environ 30 % et 50 %, respectivement, pour les hommes et les femmes âgés de 60 ans ou plus) et ils 36


sont en progression. L’amélioration des conditions de travail des travailleurs temporaires pourrait être particulièrement importante pour les travailleurs âgés. Par exemple, des hommes âgés qui actuellement ne travaillent pas pourraient prendre un emploi s’il existait davantage de possibilités de travail à temps partiel et si l’on s’efforçait d’améliorer les conditions de travail dans ces emplois. En outre, une longue durée de travail pourrait être un obstacle qui empêche les travailleurs âgés de continuer à travailler à plein temps. Enfin, certaines des femmes âgées sont confrontées à des problèmes particuliers appelant des mesures spécifiques qui les aident soit à conserver leur emploi, soit à en trouver un. De plus, les femmes de ce groupe, en particulier les célibataires, sont généralement plus exposées au risque de tomber dans la pauvreté. Il n’y a pas de politique spécifique en faveur des femmes plus âgées qui travaillent. Par ailleurs, certaines mesures, comme l’allocation pour la poursuite de l’activité, semblent davantage ciblées sur les hommes âgés que sur les femmes âgées, étant donné que le problème de la retraite obligatoire ou des fortes réductions de salaires touchent un plus petit nombre de femmes qui travaillent que d’hommes. Recommandations en vue d’une réforme Un certain nombre de mesures pourraient s’avérer nécessaires pour améliorer l’employabilité et les conditions de travail des travailleurs âgés, entre autres les suivantes : •

Offrir des possibilités de formation plus complètes et plus nombreuses aux travailleurs en milieu de carrière et aux travailleurs âgés. Il faudra peut-être offrir aux adultes et aux travailleurs âgés beaucoup plus de modules de formation professionnelle bien conçus, qui tirent parti des qualifications que possèdent déjà ces travailleurs, à l’image de ce qui a été fait en Australie ces 15 à 20 dernières années. Cela pourrait attirer un plus grand nombre de candidats et donner de meilleurs résultats que des programmes de formation de plus longue durée. Les programmes auxquels l’Allocation à l’éducation et à la formation donne accès devraient être revus de telle manière qu’un plus grand nombre de travailleurs âgés les suivent.

•

Continuer à améliorer la qualité du SPE. La qualité des services de placement et des services de conseil en gestion de carrière doit encore être améliorée. Il faut continuer à développer le SPE qui a été récemment étoffé, à condition d’évaluer son efficacité. Il conviendrait d’étudier la possibilité de sous-traiter certaines activités à des agences de l’emploi ou services de placement privés et sans but lucratif pour les


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demandeurs d’emploi âgés ayant des besoins particuliers, en s’inspirant de l’expérience des Silver Human Resources Centres. •

Offrir des incitations financières plus avantageuses pour le réemploi des demandeurs d’emploi âgés. D’autres pays de l’OCDE ont introduit des prestations liées à l’exercice d’une activité et des exemptions de gains pour les chômeurs. Avec ces prestations, le risque d’un effet d’aubaine est moins grand qu’il ne l’est avec un autre type de programme car actuellement les chances de réemploi des travailleurs âgés au chômage sont faibles.

•

Améliorer les modalités d’emploi pour le travail temporaire. Il conviendrait de donner aux travailleurs temporaires un meilleur accès au système de sécurité sociale et leurs salaires devraient être alignés sur ceux des travailleurs permanents.

•

Diminuer la durée du travail et améliorer les conditions de travail. Le gouvernement devrait également inciter les employeurs à réduire la durée du travail, éventuellement en fixant des objectifs pour la réduction du temps de travail notamment des travailleurs âgés, ainsi qu’en encourageant de meilleures pratiques pour améliorer plus généralement les conditions de travail des travailleurs âgés.

Autres domaines de réforme Indiquer plus clairement comment les objectifs seront atteints et quels sont les coûts et avantages probables Les objectifs que le gouvernement préconise actuellement sont « l’emploi jusqu’à 65 ans » et « l’emploi à tout âge ». Il semble pour le moment avoir fait porter l’essentiel de ses efforts sur la réalisation de « l’emploi jusqu’à 65 ans », en adoptant un ensemble élargi de mesures ciblées sur les travailleurs âgés, comportant notamment des subventions salariales. Bien que ces mesures aillent assurément dans la bonne direction en termes d’amélioration du maintien dans l’emploi des travailleurs âgés de 60 à 64 ans – qui connaissent actuellement une grande précarité dans l’emploi – elles pourraient entraîner une certaine dégradation de la situation sur le marché du travail des travailleurs âgés de 65 ans et plus par rapport à celle des travailleurs qui ont la soixantaine. Ainsi, lorsque des mesures ont été adoptées pour relever l’âge de la retraite obligatoire à 60 ans, la situation sur le marché du travail du groupe des 60 à 64 ans s’est considérablement détériorée pendant les années 1990 par rapport à celle du groupe des 55 à 59 ans.

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Simultanément, le gouvernement a déclaré que son objectif ultime était « l’emploi à tout âge ». Toutefois, il ne semble pas que l’on fasse passer un message clair quant aux profonds changements à apporter dans les pratiques de gestion des ressources humaines pour atteindre cet objectif et aux difficiles choix politiques que cela implique. Ainsi, il faudra peut-être donner plus de poids au marché du travail externe pour améliorer les possibilités de recrutement des travailleurs plus âgés, mais on ne pourra peut-être le faire qu’au prix d’une moindre sécurité de l’emploi des salariés permanents. Par conséquent, les mesures requises pour atteindre l’objectif de l’emploi à tout âge et leurs conséquences probables sur la situation des travailleurs âgés sur le marché du travail devraient être énoncées plus clairement. Une évaluation systématique des mesures et des programmes est capitale Il faut féliciter les décideurs japonais pour la rapidité avec laquelle ils ont formulé et appliqué de nouvelles mesures destinées à résoudre les problèmes nouveaux auxquels les seniors se heurtent sur le marché du travail. La mise en œuvre de ces mesures doit, cependant, aller de pair avec un programme rigoureux et systématique d’évaluation permettant d’observer ce qui marche et ce qui ne marche pas et de tenir compte de ces enseignements dans la conception et la mise en œuvre des mesures. Il est important également de disposer de statistiques appropriées pour déterminer quelles sont les questions les plus importantes pour les pouvoirs publics et évaluer les résultats des politiques. Au Japon, les statistiques relatives au marché du travail sont généralement de grande qualité. Il existe néanmoins un certain nombre de domaines où des améliorations pourraient être apportées pour mieux appréhender la situation des travailleurs âgés sur le marché du travail et améliorer l’accès aux données. Il pourrait être opportun notamment de réaliser une étude longitudinale permettant de retracer les décisions prises en matière d’emploi et de retraite ainsi qu’une enquête spéciale sur les conditions de travail. Adopter des politiques de l’emploi plus favorables aux familles En termes de mobilisation de l’offre de main-d’œuvre plus généralement, il existe une marge de manœuvre pour augmenter les taux d’activité des femmes d’âge très actif. Ce facteur peut à son tour induire une augmentation des taux d’activité de ces femmes plus tard dans leur vie professionnelle, pour arriver à des taux qui seront plus élevés que ceux des cohortes actuelles de femmes âgées. Les taux d’activité, tant des femmes d’âge très actif que des femmes plus âgées, sont nettement inférieurs à ceux des hommes. L’écart est beaucoup plus important qu’il ne l’est dans de nombreux autres pays de l’OCDE. Bien que la AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

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réforme du système de pensions puisse contribuer à cet objectif, il faut également mettre en œuvre des politiques de l’emploi favorables aux familles afin que les Japonaises soient mieux à même et plus désireuses d’établir de plus longues carrières professionnelles. Poursuivre les réformes structurelles Enfin, les mesures qui réduisent les obstacles à la création d’emplois et stimulent la croissance de l’emploi plus généralement sont susceptibles d’être particulièrement profitables aux travailleurs âgés. Par conséquent, il est important que le Japon continue à mener des réformes structurelles de grande envergure. Compte tenu de l’aggravation du chômage déjà élevé des jeunes, ces réformes pourraient aussi contribuer à apaiser les inquiétudes de ceux qui craignent que le prix à payer pour les mesures qui encouragent les travailleurs âgés à rester plus longtemps dans l’emploi soit une aggravation de la situation des jeunes sur le marché du travail. Dans l’ensemble des pays de l’OCDE, on observe de fait une corrélation positive entre la situation de l’emploi des travailleurs âgés et celle des jeunes. En effet, les pays où la diminution des taux d’emploi des travailleurs âgés a été la plus faible ont également enregistré en général la plus faible diminution des taux d’emploi des jeunes et la plus faible hausse du chômage des jeunes. Néanmoins, si un plus grand nombre d’emplois sont créés pour toutes les classes d’âge grâce aux réformes structurelles, les mesures nécessaires pour encourager les travailleurs âgés à rester dans la vie active continueront peut-être à bénéficier d’un large soutien au Japon. Si le Japon parvient à maintenir des taux d’activité élevés pour les travailleurs âgés, il sera également mieux placé pour relever les défis auxquels il est confronté en raison du vieillissement rapide de sa population.

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INTRODUCTION

Japan has one of the oldest populations of all OECD countries. The number of older people is rising rapidly and, by 2050, more than one in three Japanese are likely to be over the age of 65. Japan’s working age population (aged 20-64) has already begun to contract and its total population is likely to reach a peak within the next few years followed by a substantial decline over the next half century. Inevitably, Japan’s labour force will also undergo a steep decline. This, in turn, will lower economic growth at the same time as public expenditures on pensions and health are likely to be rising. A contracting labour force could also result in severe labour shortages in certain occupations. However, the scale and timing of these developments will depend crucially on future trends in the mobilisation of Japan’s potential labour supply. Maintaining high participation rates among the growing ranks of older people and improving job quality will be of particular importance. However, older workers in Japan are already experiencing a number of difficulties in the labour market. Over the long-term this could have a negative impact on their decisions to remain in the labour force and could lead to earlier retirement. Therefore, it is important that appropriate measures are taken now to encourage older workers to remain active in the labour market and to improve their skills and employability. The main purpose of this report is to reflect on the different avenues for reform that will need to be pursued in order to meet this objective. In Chapter 1, the demographic challenges facing Japan are laid out and the importance of improving employment prospects of older workers as the key to meeting these challenges is highlighted. The current labour market situation of older workers in Japan is examined in more detail in Chapter 2 and some of the key problems that they are facing are identified. Potential supply-side barriers to employment of older workers are discussed in Chapter 3, including the impact of Japan’s old-age pension system and other social security arrangements on the work and retirement decisions of older people. A number of possible reforms to strengthen work incentives are outlined. But removing supply-side barriers to employment is not enough; action on the demand side is also needed. Thus, in Chapter 4, an assessment is made of the main factors influencing employer AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

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attitudes towards older workers and the different options for improving the retention and hiring of older workers. This is complimented in Chapter 5 by an analysis of the different ways to improve the “employability” of older workers through providing more training opportunities and strengthening the role and effectiveness of other labour market programmes, including the public employment service.

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Chapter 1 THE CHALLENGE AHEAD

1.

The demographic challenge

According to recent projections, Japan’s population is likely to stop growing before the end of the current decade and is expected to decline substantially over the next half century (see Box 1.1 for more details concerning these projections). Between 2000 and 2050, the population is projected to fall by around 26 million, i.e. back to the levels last recorded in the 1970s or earlier.1 The key factors behind this transition include declining fertility rates and rising life expectancy. Net migration flows have had little impact on demographic trends in Japan.2 The total fertility rate has fallen from just over 2.13 in the early 1970s (i.e. just above the replacement rate) to 1.36 in 2000 (Figure 1.1). Other OECD countries, especially in Europe, have followed a similar pattern. In contrast, fertility rates have been rising gradually in the US since 1976. The low total fertility rate in Japan is projected to continue over the coming decades. The decline in fertility was accompanied by a sharp decline in mortality rates. Consequently, life expectancy at birth has risen rapidly in Japan and in 2000 was 77.6 years for men and 84.6 years for women. These are among the highest in the world. By 2050, it is projected that life expectancy at birth will 1.

In fact, long-range projections by the National Institute of Population and Social Security Research (Population Projection for Japan 2002) suggest that Japan’s population may continue to decline through to 2100, by which time its population would be at the same level as it was in 1930.

2.

Among OECD countries, Japan has one of the lowest shares of foreigners in the total population and labour force. In 1998, the population share of foreigners in Japan was only 1.2%, while that of Switzerland was 19% (OECD, 2001a, Chapter 5).


43

rise further to around 81 years for men and to just over 89 years for women. Life expectancy at age 65 has also increased considerably for men and women in Japan and is higher than in almost all other OECD countries. Currently, for workers retiring at age 65 in Japan, they can expect to receive the old-age pension for around 17½ years in the case of men and for around 22½ years in the case of women. Figure 1.1. Life expectancy at birth and fertility rates in Japan, 1970-2050 Actual

Female life expectancy at birth

85

Life expectancy

2.5

Projected

80

2.2

1.9 Male life expectancy at birth

75

1.6

70

1.3

Total fertility rate

45

40

35

30

25

20

15

10

05

00

95

90

85

80

50 20

20

20

20

20

20

20

20

20

20

20

19

19

19

19

19

75

1

70

65

19

Fertility rate

90

Source: National Institute of Population and Social Security Research, Population Projection for Japan: 2001-2050 (medium variant for projections).

Together, these patterns in fertility rates and life expectancy shape the way that Japan’s population will age. A broad indicator of the rising economic burden that an older society may place on the working-age population is given by the old-age dependency ratio, i.e. the ratio of the population aged 65 and over to the population aged 20 to 64.3 At around 28% in 2000, Japan currently has the fifth highest old-age dependency ratio among OECD countries (Figure 1.2). However, Japan’s population is projected to age more rapidly than in most other OECD countries. Consequently, its old-age dependency ratio is projected to be the highest at more than 50% in 2025 and over 70% in 2050.

3.

44

The old-age and total dependency ratios are conventionally defined with respect to the population aged 15 to 64. However, in most OECD countries, teenagers aged 15 to 19 are more often than not still in school and so it was decided to exclude this group from the definition of the working-age population. AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

Box 1.1. Population projections The population projections used in this report are based on the medium variant of the population projections produced by the National Institute of Population and Social Security Research (2002). The Institute has also produced low and medium variants of 1 its projections based on different assumptions about future fertility rates. In all three variants, Japan’s population is projected to peak before 2010 and to decline subsequently at a relatively rapid rate of between -0.4 and -0.8% per year over the following 40 years. Over the period 2000-2050, this would represent a decline in the total population of between 19 to 35 million. Clearly, the projected decline in Japan’s population may be smaller or bigger than shown in these variants if alternative assumptions were made concerning mortality rates and net migration, as well as fertility rates. For example, the decline in population would be lower if mortality rates decline by more than projected or if net immigration is higher than projected. Nevertheless, these projections suggest that Japan is facing a substantial decline in its population that is likely to begin within the next few years. Consequently, Japan’s labour force is also likely to contract substantially over the course of the next half-century. Population projections: low, medium and high variantsa Millions 130 125 120 115

Historical Low Medium High

110 105 100 95 90 85

19 50 19 55 19 60 19 65 19 70 19 75 19 80 19 85 19 90 19 95 20 00 20 05 20 10 20 15 20 20 20 25 20 30 20 35 20 40 20 45 20 50

80

a) The three variants differ in their assumptions about future fertility rates. Source: National Institute of Population and Social Security Research, Population Projection for Japan: 2001-2050. 1.

In 2050, the total fertility rate is projected to be 1.10, 1.39 and 1.63, respectively, according to the low, medium and high variants. This compares with its level in 2000 of 1.36. All of the variants use the same assumptions about mortality rates such that life expectancy at birth rises from 77.6 for males and 84.6 years for females in 2000 to 81.0 and 89.2 years, respectively, in 2050. The same assumption is also made in each variant that Japan’s low rate of net migration, historically, will continue into the future.


45

Figure 1.2. Demographic dependency ratios, 2000-2050 Percentages 120

80 a

B. Total dependency ratiob

A. Old age dependency ratio

Japan 110

70 Korea

Czech Rep. Japan

100

60

Korea Germany

Japan 50

Mexico 90

OECD Sweden Sweden Germany

40

30

20

Sweden Japan Germany

US OECD Korea

US Sweden Japan

80

US

Turkey

OECD US

OECD Germany

70

Sweden US OECD

60

Japan Germany Korea

US OECD Germany Sweden

Turkey

Korea Turkey

Turkey 10

0 1975

Korea Mexico

2000

50

2025

2050

40 1975

2000

2025

2050

a) Ratio of the population aged 65 and over to the population aged 20-64. b) Ratio of the sum of the population aged less than 20 and the population aged more than 65 to the population aged 20-64. Source: National projections; EUROSTAT Population Projections (1999 revision); and UN, World Population Prospects 1950-2050 (The 2000 Revision).

These changes in the old-age dependency ratio tell only part of the story about the additional economic burden that may result from population ageing. There will also be fewer children to support. The total dependency ratio takes this factor into account since it is defined as the ratio of the combined population aged less than 20 and 65 and over to the population aged 20 to 64. For Japan, it is projected to rise significantly over the next 25 years from being one of the lowest among OECD countries to being one of the highest. Thus, the rise in Japan’s older population will be greater than the fall in its younger population. In fact, this pattern is projected to continue through to 2050 by which time there will be slightly more than one person of “non-working” age for every person of “working-age” in Japan compared with a ratio of around two to three currently. 46


2.

Potential economic and social impacts

The demographic transition to an aged society will have serious economic and social repercussions. It will create, among other things, a severe strain on public finances. Total public expenditures associated with ageing are expected to rise by 3% of GDP over the next five decades.4 The main component of this increase will be the rise in expenditure on health care and long-term care but expenditures on old-age pensions will also increase. The increase in public expenditures as the population ages, and the associated hikes in taxes and social security contributions that will be required to finance them, could give rise to a number of intergenerational inequities and tensions. Much of this extra burden of taxation will fall on the working-age population while at the same time their political power in terms of voting numbers may be in decline relative to the growing number of older people. This could make the necessary adjustments to cope with an ageing society more difficult in the future. The demographic changes now underway will also have a negative impact on labour force growth. The future size of the labour force will depend not only on demographic changes but also how participation rates change over time. Participation rates are not easy to predict with much accuracy. Therefore, a number of scenarios have been developed which make different assumptions about how participation rates could change over the next half century (Figure 1.3): •

4.

First, in the “constant” or baseline scenario, participation rates by age and gender are assumed to remain constant at their 2000 levels. Accordingly, Japan’s labour force is projected to start contracting within the next decade and will decline to around 45.2 million in 2050 from its level of 67.7 million in 2000.

These OECD projections were made on the basis of similar macroeconomic and demographic assumptions in each OECD country, allowing for meaningful international comparison. For details regarding these projections, see OECD (2001b). However, they may be on the conservative side since other national projections of public expenditures suggest that expenditures on public pensions alone may rise from 12% of national income in 2002 to 15% by 2025.


47

a

Figure 1.3. Labour force growth, 1950-2050 Millions, projections after 2000 Historical

Constant

Decline

Maximum

75 70 65 60 55 50 45 40

50

45

20

40

20

35

20

30

20

25

20

20

20

15

20

10

20

05

20

00

20

95

20

90

19

85

19

80

19

75

19

70

19

65

19

60

19

55

19

19

19

50

35

a) The “constant” projections assume that participation rates by five-year age groups and gender remain constant at their 2000 levels. The “declining” projections also assume constant participation rates up to and including the age group 45-49 but for the older age groups they are projected to decline such that by 2030 they are at the same level as the OECD average of these rates in 2000. The “maximum” projections assume that participation rates by age and gender converge by 2030 to the corresponding maximum rate observed across OECD member countries in 2000 and remain constant thereafter. Source: OECD estimates based on: labour force surveys for Japan and other OECD countries; and National Institute of Population and Social Security Research, Population Projection for Japan: 2001-2050 (medium variant).

•

48

In the second or “declining” scenario, participation rates for the older population are assumed to converge over the period 2000-2030 to the lower OECD average levels of 2000 and remain constant thereafter. This allows for the possibility that more workers in the future will choose to retire at an earlier age than currently. In this case, the labour force also starts contracting within the next decade but the decline is steeper than in the “constant” scenario. Consequently, the labour force is projected to be only 38.5 million in 2050.


•

Finally, in the “maximum” scenario, participation rates by age and gender are assumed to converge over the period 2000-2030 to the corresponding maximum rate observed across OECD countries in 2000 and remain constant thereafter. 5 In the case of Japan, this results in a particularly steep increase in participation rates for youth and for women up to the age of 60. Under this scenario, the labour force peaks at a level of around 69 million in 2010 before declining to around 53 million in 2050.

These scenarios show a wide range in the size of the labour force over the next half-century but they all point to a contraction in the labour force within the next decade. However, they also suggest that there is considerable scope for changes in policy and institutional settings that affect participation rates to influence the extent of the eventual decline in the labour force. In particular, they point to the importance of ensuring that a high proportion of older people continue to work. For instance, under the baseline scenario, labour force growth over the next two decades is projected to decline by 0.5% per annum following growth of 0.9% per annum in the previous two decades (Table 1.1 and Figure 1.4). Alternatively, under the “declining” scenario, a decline in participation rates for the older population would result in the labour force shrinking at an even faster rate of -0.95% per annum over the next two decades. Under the maximum scenario, labour force growth over the next two decades would actually be marginally positive. In all of these scenarios, the labour force declines at a faster rate after 2020, but again the magnitude of this drop will be larger if participation rates for the older population fall and it will be smaller if there is a general rise in participation rates. Using the same assumptions about participation rates remaining constant at their 2000 levels, these changes in labour force growth can be compared across OECD countries (Figure 1.4). Over the next two decades, labour force growth will be much slower in Japan than on average in the EU or in the OECD area as a whole. Over the period 2020-2050, this gap may even widen further since the rate of decline in Japan’s labour force could be particularly steep. In contrast, the United States is projected to experience a positive and uniform growth in its labour force over the whole of the next half-century.

5.

Excluding Iceland, Luxembourg and Mexico.


49

Table 1.1.

Labour force growth under various scenariosa Average annual percentage change

Constant participation rates -0.51 -1.00 -0.80

2000-2020 2020-2050 2000-2050

Maximum participation rates 0.04 -0.83 -0.49

Declining participation rates -0.95 -1.24 -1.12

a) The “constant” projections assume that participation rates by five-year age groups and gender remain constant at their 2000 levels. The “declining” projections also assume constant participation rates up to and including the age group 45-49 but for the older age groups they are projected to decline such that by 2030 they are at the same level as the OECD average of these rates in 2000. The “maximum” projections assume that participation rates by age and gender converge by 2030 to the corresponding maximum rate observed across OECD member countries in 2000 and remain constant thereafter. Source: OECD estimates based on: labour force surveys for Japan and other OECD countries; and National Institute of Population and Social Security Research, Population Projection for Japan: 2001-2050 (medium variant). a

Figure 1.4. Labour force growth in OECD countries, 1980-2050 Average annual growth 1980-2000 -1.6

-1.2

2000-2020 -0.8

-0.4

0.0

2020-2050 0.4

0.8

1.2

1.6

0.9 -0.5

Japan -1.0

1.1 OECD

0.4 0.0 0.6

EU

-0.1 -0.5 0.5

France

-0.1 -0.3 0.5 0.2

United Kingdom -0.2

1.4 United States

0.6 0.5

a) The projections of labour force growth over the period 2000-2050 assume that participation rates by five-year age groups and gender remain constant at their 2000 levels. Source: OECD estimates based on: labour force surveys for Japan and other OECD countries; and national and international population projections.

50


One of the economic consequences of such a steep contraction in Japan’s labour force is likely to be much slower growth in output. Under the baseline scenario, real GDP growth could decline by about 1.1 percentage points per annum over the next 50 years, relative to the growth rates experienced over the period 1980-2000. 6 The decline under the “declining” and “maximum” scenarios would be around 1.3 and 0.9 percentage points, respectively. However, the impact of slower or negative labour force growth on economic growth could be offset by either a rise in total factor productivity growth or faster growth in capital inputs. Nevertheless, a shrinking labour force could lead to severe labour shortages in certain occupations, especially in those areas such as nursing and long-term care where labour demand will expand as a consequence of rapid growth in the elderly population. 3.

Key issue: employment prospects for older workers

Promoting high rates of labour force participation rates among older people will play a key role in responding to the economic challenges raised by population ageing. The mobilisation of older workers will depend on how long they remain in the labour force before retiring. Figure 1.5 suggests that there has been a long-term decline in Japan in the average effective age of retirement, although it did rise slightly between the late 1980s and early 1990s.7 Population ageing will also be reflected in an older workforce (Figure 1.6). Currently, older workers (i.e. aged 50 and over) account for around 36% of Japan’s labour force. However, assuming participation rates by gender and five-year age groups do not change, 43% of the labour force will be aged 50 and over in 2030. Moreover, the proportion of much older workers (aged 65 and over) is likely to rise from just over 7% of the total labour force in 2000 to over 13% in 2050.

6.

In accounting for output growth, the contribution from labour growth is often given a weight of around 0.65. The slowdown in labour growth of 1.71 percentage points – the difference in the average annual growth rate over the period 1980-2000 (0.91%) and the projected growth rate over the period 2000-2050 (-0.80%) – means that annual average potential growth would decline by around 1.1% (0.65x1.71).

7.

The effective age of retirement refers to the average age at which people aged 40 and over withdrew from the labour force over any given five-year period. It is estimated using information on participation rates and effectively assumes that no exits from the labour markets occur because of death and that the population structure by age remains constant over time.


51

Figure 1.5. Average effective retirement age in Japan, 1950-2002a 75 74 73

Men

72 71 70 69 68

Women

67 66 65 64 63

19 6

19 6

065 26 19 7 64 -6 19 9 66 -7 19 1 68 -7 19 3 70 -7 19 5 72 -7 19 7 74 -7 19 9 76 -8 19 1 78 -8 19 3 80 -8 19 5 82 -8 19 7 84 -8 19 9 86 -9 19 1 88 -9 19 3 90 -9 19 5 92 -9 19 7 94 -9 19 9 96 -0 1

62

a) Estimated average age at which individuals older than 40 left the labour force during any given five-year period. The estimates are derived using pseudo cohorts by five-year age groups for persons initially aged 40 and over. They are calculated by weighting the average age of each cohort over a given five-year period by its share of the total decline in participation rates for all cohorts between the beginning and end of the period. Source: OECD estimates based on Labour Force Survey.

Figure 1.6. Japan's ageing labour force over the next 50 years Percentage of the total labour force 15-24 100

25-49

50-64

7.3

9.1

10.8

28.8

28.0

27.6

10.2

65+ 12.7

13.3

90 80

32.7

30.6

29.1

48.2

48.1

48.9

70 60 50 40

52.7

53.7

52.6

11.2

9.2

9.0

8.9

8.6

8.7

2000

2010

2020

2030

2040

2050

30 20 10 0

Source: OECD projections based on Labour Force Survey and National Institute of Population and Social Security Research, Population Projection for Japan: 2001-2050 (medium variant), and assuming constant participation rates by sex and five-year age groups at their 2000 levels.

52


Chapter 2 THE CURRENT LABOUR MARKET SITUATION

As pointed out in the previous chapter, maintaining high labour force participation rates among older people will be of crucial importance if Japan is to cope with the future challenges of a declining and rapidly ageing population. However, older people in Japan are already facing a number of difficulties in the labour market and this situation could worsen in the future if economic growth remains stagnant while the number of people in the older age groups continues to rise. This could, in turn, have a negative impact on their desire to remain in the labour force. The purpose of this chapter, therefore, is to identify those areas where action may be required to improve the labour market situation of older people. The first section of the chapter examines whether the impact of stagnant economic growth over the past decade has had a negative effect on labour force participation rates of older people in Japan. It also looks at whether there is much scope to increase these participation rates, given that they are already very high by international standards. The second section describes the employment situation of older Japanese workers in terms of where they work and in what type of jobs. It also looks at whether the Japanese practice of “lifetime” employment has been undermined leading to a rise in job insecurity. The third and final sections of the chapter examine unemployment and inactivity among older people. 1.

Recent economic developments and labour force participation

Following the collapse of Japan’s “bubble economy” in the early 1990s, economic growth has been anaemic. GDP rose by only 1.1% per annum over the decade to 2002, at constant prices, compared with a rate of 3.9% during the previous decade. In response, employment fell by 0.2% per annum over the decade to 2002 following growth of 1.3% over the previous decade. Consequently, unemployment has risen from just over 2% of the labour force in 1990 to 5.4% in 2002.


53

Despite the generally morose state of the Japanese economy, labour force participation rates for 50-year olds and over have held up surprisingly well and even increased significantly for women (Figure 2.1). For men aged 55-59, there was a slight increase over the 1990s in comparison with almost unchanged participation rates for prime-age men (25-49) and men in their early 50s. For women both in their early and late 50s, participation rates over the past 10-15 years have risen in line or even slightly faster than the long-term trend rise in participation rates for prime-age women. Figure 2.1. Participation rates by age and gender in Japan, 1970-2002 Percentages 15-24

25-49

50-54

55-59

100

100

95

95

90 85

60-64

65+

90

Men

85

80

80

75

75

70

70

65

65

60

60

55

55

50

50

45

45

40

40

35

35

30

30

25

25

20

20

15

15

10

10

5

5

0 1970 1974 1978 1982 1986 1990 1994 1998 2002

Women

0 1970 1974 1978 1982 1986 1990 1994 1998 2002

Source: Labour Force Survey.

For those aged 60 and over, the situation has been very different. For men aged 60-64, participation rates initially rose during the 1990s but have been declining since around 1994. For men aged 65 and over, a similar pattern can be observed, except that their participation rate has fallen to an historic low. For both groups, participation rates in recent years appear to have resumed their long-term trend decline, although the decline has been much steeper for men aged 65 and over than for men aged 60-64. In the case of women aged 60 and over, participation rates have either been stable or have only declined slightly but this needs to be seen against a pattern of strongly rising participation for younger women. It should also be noted that despite some increase over time, 54


participation rates for women in each age group remain well below the corresponding rates for men, except in the age group 15-24. Thus, there would appear to be an increasing degree of polarisation among older Japanese people in participation rates between those in their 50s and those aged 60 and over. Two questions arise. First, to what extent are these differences between age groups and between men and women likely to persist in the future? Second, what scope is there for either raising these participation rates or at least preventing them from declining further, especially in the older age groups? These questions are tackled in more detail in the subsequent chapters, which look at the factors influencing older people’s work and retirement decisions. However, another approach is to check whether participation rates for older people are significantly higher in Japan than elsewhere, which may suggest that there is more of a risk of them declining than of them rising in the future. The comparisons in Figure 2.2 indicate that Japan does indeed have exceptionally high participation rates for older men in comparison with other OECD countries. In 2002, only Iceland had a higher rate for men aged 50-64 and only Mexico, Korea and Iceland had higher rates for men aged 65-74. Thus, the main challenge for Japan will be to avoid any long-term slide or convergence in the participation of older men to the OECD average. For older women, the picture is somewhat different. In 2002, Japan ranked only 11th out of all OECD countries in terms of participation rates for women aged 50-64, although it was third highest for women aged 65-74. Thus, in the case of older women, there would appear to be more scope for some future increase in participation rates. Clearly, these will require measures directed at older women but it will also require measures to raise the participation rate of prime-age women (25-49) – which is currently the 7th lowest out of all OECD countries. An increased participation of women in the labour force when they are younger is likely to be reflected in a higher participation of these women when they become older. In addition, participation rates for both less educated older men and women in Japan are lower than for their better educated counterparts (Figure 2.3). Therefore, policy measures to raise the participation rates of older people, or to maintain these rates at a high level, may need to focus on the less educated. This difference by educational attainment may also imply that participation rates for older people could rise in the future since older people in the future will be better educated than currently. For instance, assuming AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

55

unchanged participation rates by age and educational attainment, the expected increase in education attainment of the population over the next 25 years would raise the participation rate of older people (aged 50-64) by 1 percentage point from around 72% in 2000 to 73% in 2025. Figure 2.2. Participation rates by age and gender in OECD countries, 2002 Percentages Men aged 50-64

Men aged 25-49

0

20

40

60

80 100

0

20

TUR

40

60

80 100

60

80 100

0

0

20

40

60

80 100

20

40

60

80 100

Women aged 65-74

ISL SWE NOR FIN DNK NZL USA CHE GBR CAN JPN PRT FRA KOR AUS CZE DEU NLD IRL POL SVK OST HUN MEX GRC ESP BEL LUX ITA TUR

ISL SWE FIN DNK SVK NOR CHE CAN OST CZE PRT FRA POL DEU NLD GBR USA BEL NZL AUS HUN IRL LUX JPN ESP GRC ITA KOR MEX

20

40

MEX KOR ISL JPN TUR PRT USA NZL IRL CHE NOR SWE AUS CAN DNK POL GBR GRC NLD CZE ITA FIN DEU OST ESP HUN LUX SVK FRA BEL

Women aged 50-64

Women aged 25-49

0

Men aged 65-74

ISL JPN MEX CHE NZL SWE NOR KOR USA DNK IRL CAN PRT GBR CZE ESP AUS NLD GRC FIN DEU FRA SVK ITA OST LUX TUR POL BEL HUN

ISL MEX JPN CHE LUX CZE GRC FRA OST NLD SVK DEU PRT BEL ESP DNK IRL GBR CAN KOR ITA FIN USA NZL NOR AUS TUR POL SWE HUN

KOR ISL JPN PRT MEX USA TUR NOR CHE NZL POL GBR CAN AUS SWE DNK IRL CZE GRC NLD DEU OST FIN ITA ESP HUN FRA BEL LUX SVK

0

20

40

60

80 100

Source: European Labour Force Survey and national labour force surveys.

56


Figure 2.3. Participation rates for older people (50-64) in Japan by level of educational attainment, 2001 Percentages Primary

Secondary

Tertiary

100 95 90 85 80 75 70 65 60 55 50 45 40 Total

Men

Women

Source: OECD estimates based on the Labour Force Survey and Special Survey of the Labour Force Survey.

2.

The employment situation of older people

Future participation rates for older people will also be influenced by the type of jobs they can get and their workplace environment. In terms of their current job characteristics, older workers in Japan are more likely than younger workers to be either self-employed, family workers or directors (Table 2.1). On the one hand, over two-thirds of all self-employed are over the age of 50 compared with just over a third for all persons in employment. For family workers this proportion is three-fifths and for directors it is almost two-thirds. Compared with all employees, older workers also make up a higher proportion of daily workers. On the other hand, just over a quarter of all ordinary employees are older workers. Altogether, only around 60% of all older workers are regular employees. By occupation, older workers are more likely than younger workers to be managers and officials, agricultural workers, transport and communications workers in the case of men, and craft and trades workers and ordinary labourers in the case of women. They tend to be under-represented as professional and technical workers, and as clerical and related workers, especially in the case of women. Overall, almost 45% of older workers are working in potentially physicallydemanding jobs as manual workers.8 8.

Manual occupations include “agricultural, forestry and fishery workers”, “transport and communications workers”, “craft and related trade workers” and “labourers”.


57

Table 2.1. Japanese older workers by selected job characteristics, 2002 Percentages Older workers (aged 50 and over) in each category: As a share of all employed persons in each category

As a share of all older workers

Total

Men

Women

Total

Men

Women

37.0

37.8

35.9

100.0

100.0

100.0

Self-employed

68.7

70.1

64.6

19.6

24.5

12.1

-- Agriculture

87.6

88.1

85.0

4.8

6.8

1.8

-- Non-agricultural industries

64.1

65.3

61.3

14.8

17.8

10.2

Family worker

61.3

25.9

68.8

8.0

1.1

18.3

-- Agriculture

76.0

41.2

79.8

3.2

0.5

7.2


53.7

17.1

62.2

4.7

0.5

11.0 69.0

All employed Employment status

Employee

31.7

33.1

29.7

72.1

74.1

-- Agriculture

53.8

45.5

62.5

0.9

0.7

1.1


31.6

33.0

29.5

71.3

73.4

67.9

. Regular employee

31.3

32.6

29.1

61.2

67.0

52.2

-- Ordinary employee

28.1

28.8

26.8

50.1

53.2

45.2

-- Director

65.6

65.4

66.0

11.0

13.8

6.9

. Temporary employee

32.1

36.7

29.9

8.2

4.9

13.2

. Daily employee

37.9

40.4

35.9

1.9

1.5

2.5

Professional and technical worker

24.0

27.4

19.8

9.1

9.4

8.6

Manager and official

73.8

74.4

77.8

5.9

8.8

1.5

Clerical and related worker

28.7

34.3

25.2

15.0

11.5

20.4

Occupation

Sales worker

34.2

32.2

37.7

13.6

13.3

14.2

Security worker and service worker

36.8

33.1

39.7

11.3

7.4

17.1

Agricultural, forestry and fishery worker

77.0

74.6

80.3

9.6

8.9

10.5

Transport and communications worker Production process worker and labourer

44.1

45.5

27.3

4.0

6.4

0.3

39.8

36.2

48.5

30.9

33.5

26.7


In terms of their current workplace characteristics, older workers in Japan are more likely than younger workers to be employed in mining and agriculture and in the personal services sector (Table 2.2). They are less likely to be working in public utilities, professional services, amusement services and in government administration. They are also more likely to be employed in smaller enterprises, with the proportion of older workers falling steadily as the size of enterprise increases. Overall, just under 40% of all older workers are employees of enterprises with less than 100 employees compared with around 25% who are employees of enterprises with 100 or more employees.

58


Table 2.2. Japanese older workers by selected workplace characteristics, 2002 Percentages Older workers (aged 50 and over) in each category: As a share of all employed persons in each category

As a share of all older workers

Total

Men

Women

Total

Men

Women

37.0

37.8

35.9

100.0

100.0

100.0

Agriculture, forestry and fishing

76.7

74.4

78.7

9.7

8.8

10.7

Mining

40.0

50.0

0.0

0.1

0.1

0.0

Construction

39.8

39.9

39.1

10.5

14.9

3.9 17.7

All workplaces Industry

Manufacturing

36.9

35.3

40.1

19.2

20.2

Public utilities

26.5

24.1

20.0

0.4

0.5

0.1

Transport and communication

36.7

39.1

26.0

6.3

9.0

2.1

Wholesale trade

34.2

36.5

29.4

5.4

6.4

3.8

Retail trade

36.1

35.2

36.6

12.0

8.3

17.5

Food and drinking places

35.3

29.3

39.8

4.4

2.4

7.5

Finance, insurance and real estate

34.4

40.5

27.8

3.5

3.6

3.4

Professional services

29.4

36.3

24.0

9.9

8.8

11.4

Other services

35.6

35.8

35.3

15.4

12.7

19.5

Other government services

28.1

29.4

23.4

2.6

3.5

1.2

Private/public sector (employees only) Private sector

32.0

33.2

30.1

65.3

66.7

63.1

Public sector

29.4

31.6

25.9

6.8

7.4

5.9

Workplace size (non-agricultural private sector employees only) (No. of employees) 1-4

45.3

45.1

45.9

8.0

7.4

8.9

5-29

34.9

36.4

33.3

19.7

19.3

20.4

30-99

32.9

34.5

31.1

12.1

12.1

12.2

100-499

28.7

30.6

25.9

11.4

11.9

10.6

500-999

26.0

27.7

22.1

3.4

3.8

2.7

1000+

24.9

27.1

21.1

9.3

11.0

6.9


Those sectors or occupations where older workers account for a relatively high proportion of the workforce have tended to be the ones experiencing the greatest declines in total employment over the past decade. For instance, there is a negative correlation (-0.53) between the proportion of older workers in total employment in each sector in 2001 and the growth in total employment over the


59

1990s in the corresponding sector (Figure 2.4). 9 The textile industry, in particular, experienced a large fall in employment of over 40% between 1990 and 2000 and more than half of all of the remaining workers in this industry are older workers. Similarly, there is a negative correlation (-0.75) between employment shares of older workers and job growth by occupation (Figure 2.5).10 In particular, there has been a large fall in employment among managers and officials who tend to be mostly older workers. At the other end of the scale, there has been a very strong increase in employment for professional workers and technical workers, of whom less than one quarter are older workers. Figure 2.4. Employment share of older workers, 2001, and overall job growth by industry, 1990-2000

Employment share, 2001

Percentages 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0

1

3 6

14

7 12 8 9

18 4

10

-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 1 = Agriculture 2 = Mining & construction 3 = Textiles 4 = Heavy chemicals 5 = Other chemicals 6 = Iron & steel 7 = Fab. metal products

20

5

0

2 11 15 13 17 16 22 24 19

23

21

5 10 15 20 25 30 35 40 45 50

Employment growth, 1990-2000 (%) 8 = Machinery 14 = Clothing & 9 = Electrical equipment household goods 10 = Transport equipment 15 = Food & drink 11 = Food, drink, tobacco 16 = Other retail trade 12 = Other manufacturing 17 = Restaurant 13 = Utilities, transport & 18 = Finance, insurance communications & real estate

19 = Professional service 20 = Personal service 21 = Business service 22 = Amusement service 23 = Other service 24 = Government


9.

This correlation is stronger for men (-0.61) than women (-0.49) and remains significant even when the agricultural sector, which is an outlier, is excluded.

10.

Again, this correlation is stronger for men (-0.80) than for women (-0.68) and remains significant even when agricultural workers are excluded.

60


Figure 2.5. Employment share of older workers, 2001, and overall job growth by occupation, 1990-2000

Employment share, 2001 (%)

Percentages 80 75 70 65 60 55 50 45 40 35 30 25 20 15 10 5 0

8 4

11

9 10

7

6 5

2

3 1

-30

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

Employment growth, 1990-2000 (%) 1 = Technician 2 = Teacher 3 = Other professional & technical worker 4 = Manager & official

5 6 7 8

= Clerical & related worker = Sales worker = Service worker = Agricultural, forestry & fishery worker

9 = Transport & communications worker 10 = Craftsman, manufacturing, mining & construction worker 11 = Labourer


A.

Lifetime employment and job security under strain

Japan has been characterised as having a strong system of “lifetime” employment (JIL, 2002). However, some observers have claimed that, in the face of weak economic growth and the need for corporate restructuring, this system may be coming under strain (see, for example, Casey, 2002). This section first looks at the extent to which Japan’s lifetime employment system guarantees job security for older workers and whether there are signs that this system is becoming less important. Average job tenure provides one indication of how widespread lifetime employment practices are in Japanese enterprises. For example, if all workers in the age group 55-59, i.e. just prior to the common mandatory retirement age of 60 (see Chapter 3), have spent their entire career with the same employer, they would have average job tenure of around 35 to 40 years, depending on when they left school. In the largest firms, there is indeed evidence of considerable job stability for men prior to the age of 60. Average tenure is 30 years for men aged 55-59 in firms with 1 000 employees or more (Figure 2.6). However, in smaller firms, especially those with less than 100 workers, average job tenure is much lower and, hence, job stability is also AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

61

lower in these firms. The flattening of the curve between the ages 50-54 and 55-59, especially in the small and medium-sized enterprises, suggests that some men leave their jobs through early retirement programmes or as a result of company restructuring before the common mandatory retirement age of 60. For women, average job tenure is much lower than for men in all age groups under 65 and firm sizes. While this may be partly explained by career breaks because of childcare and caring for elderly relatives it also points to very poor career prospects for Japanese women. Relatively few older women acquire much seniority and so there is a high risk for older working women of being employed in low-paid jobs. Figure 2.6. Job tenure by age, gender and firm size in Japan, 2002 Years 10-99 35

100-999

1000+

35

Men

Women

25

25

20

20

15

15

10

10

5

5

0

0 65 +

30

20 -2 4 25 -2 9 30 -3 4 35 -3 9 40 -4 4 45 -4 9 50 -5 4 55 -5 9 60 -6 4

30

4 9 4 9 4 9 4 9 4 -6 -5 -5 -4 -4 -3 -3 -2 -2 60 55 50 45 40 35 30 25 20

+ 65

Source: Basic Survey on Wage Structure.

These job tenure profiles thus suggest that while male workers in large firms benefit from lifetime employment, this is a much less common occurrence for female workers in firms of all sizes and for all workers in smaller firms.11 They also suggest that Japan’s lifetime employment system only provides a guarantee of a job within the same enterprise up to the age of 60, but not necessarily beyond this age. After the age of 55-59, there is a sharp fall in job tenure that is most pronounced for men in the largest firms. This fall is less pronounced for women and average job tenure subsequently picks up for women aged 65 and over. 11.

62

The data in Figures 2.6 and 2.7 refer to regular workers only and average job tenure would be somewhat lower if the increasing share of non-regular workers were also included. AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

Figure 2.7. Job tenure by age and gender in selected OECD countries, 2000 Germany 24 22

20

20

18

18

16

16

14

14

+ 65

60 -6 4

55 -5 9

50 -5 4

45 -4 9

20 -2 4

+ 65

60 -6 4

0 55 -5 9

0 50 -5 4

2

45 -4 9

4

2

40 -4 4

6

4

35 -3 9

8

6

30 -3 4

10

8

25 -2 9

US

12

10

35 -3 9

12

UK

Women

30 -3 4

Years

22

20 -2 4

Years

France

40 -4 4

Korea

Men

25 -2 9

Japan 24

a) The data for Japan and Korea refer to regular workers in enterprises with 10 or more regular workers, excluding the agricultural, hunting forestry, fishing and general government sectors. The data for the other countries are based on labour force surveys covering all workers. Source: Japanese Basic Survey on Wage Structure; Korean Wage Structure Survey; European Labour Force Survey; and Job Tenure Supplement to the US Current Population Survey.

The sharp drop in average job tenure after the age of 60 in Japan, especially for men, can be contrasted with the situation in other OECD countries (Figure 2.7). In France and Germany, average job tenure for men declines only slightly (France) or continues to rise (Germany) between the ages 55-59 and 60-64. In Korea, on the other hand, average job tenure falls steeply at an earlier age than in Japan. Interestingly, for men in the age groups 60-64 and 65 and over, average job tenure is almost the same in Japan as in the UK and the United States. In these latter two countries while average job tenure is much lower than in Japan for prime-age workers (25-49), there is also much less of a drop in tenure after the age of 60. While average job tenure for workers in their 50s is high in Japan relative to other countries, has there nevertheless been a decline in job security for older workers in Japan? Over the past two decades, average job tenure has increased for older workers (aged 50-64) in Japan, although some flattening in the trend rise occurred during the 1990s (JIL, 2002). This would appear to indicate an increase in job security for these workers.


63

However, these changes in average job tenure provide only an indirect measure of whether the risk of job loss among Japanese workers in their late 50s has risen or not. Moreover, they will also be affected by compositional changes. For instance, average job tenure will rise by more if it is workers with the shortest job tenure who lose their jobs than in the opposite case. Moreover, some workers who are retired from their jobs may not subsequently find a new job or may move outside of the scope of the survey, e.g. in the case of Japan’s establishment survey of regular workers, they switch to a daily job or become self-employed. Thus, the rise in average job tenure may be overstated as the shorter or zero years of tenure of these (former) workers are not taken into account. An alternative indicator, which takes into account some of the drawbacks of using average job tenure to measure job stability, is the five-year retention rate, i.e. the proportion of all workers who are still working with the same employer five years later.12 In general, retention rates tend to be humped shape with age (Figure 2.8). Typically, they are low for younger workers, since they change jobs relatively frequently or “job shop” while making the transition from school to work, and then rise with age as workers become more settled in their careers. They subsequently decline at the older ages as workers either reach the official or mandatory retirement age or, where this possibility exists, take advantage of an early retirement scheme. Of course, these retention rates will reflect both voluntary and involuntary quits and so, for older workers, the decline in their retention rates may also reflect involuntary job loss rather than just voluntary retirement. A comparison of retention rates confirms that there is generally more job stability for younger men in Japan than in the other OECD countries shown in Figure 2.8. However, with the exception of Korea, retention rates in these other countries continue to rise with age for men through to their mid to late 40s. In Japan, they peak much earlier, albeit at a higher level. For men aged 35-39 in 1995, more than 80% of them were still working in the same enterprise in 2000. This falls to around 65% for men who were in their early 50s in 1995. Between the ages 55-59 and 60-64, the rates drop sharply to around 20%, well below the rate in the UK and the US. Thus, while the UK and the US are generally noted for having highly flexible labour markets, there appears to be greater job security for older workers in these two countries than in Japan. 12.

64

These retention rates are estimated using cross-sectional data on job tenure rather than from directly observing job retention. They are calculated by taking the ratio of the number of workers in any given five-year age group, with at least five years of job tenure, to the total number of workers in the preceding age group five years earlier. AGEING AND EMPLOYMENT POLICIES: JAPAN– ISBN-92-64-02109-4 © OECD 2004

Figure 2.8. Retention rates by age and gender in selected OECD countries, 1995-2000a Percentages France

65 +

0 55 -5 9

10

0

50 -5 4

10

45 -4 9

20

US

Women

40 -4 4

20

20 -2 4

30

60 -6 4

40

30

55 -5 9

50

40

50 -5 4

50

45 -4 9

60

40 -4 4

70

60

35 -3 9

80

70

30 -3 4

80

25 -2 9

90

35 -3 9

Men

90

20 -2 4

UK

100

30 -3 4

100

Korea

25 -2 9

Japan

a) Retention rates refer to the proportion of workers in 1995 (1996 in the United States) who were still with the same employer five years later (four years later in the United States). The age groups refer to a worker’s age in 1995 (1996). The data for Japan and Korea refer to regular workers in enterprises with ten or more regular workers, excluding the agricultural, hunting forestry, fishing and general government sectors. The data for the other countries are based on labour force surveys covering all workers. Source: Japanese Basic Survey on Wage Structure; Korean Wage Structure Survey; European Labour Force Survey; and Job Tenure Supplement to the US Current Population Survey.

For women, retention rates are significantly lower than for men in Japan, especially for prime-age women (Figure 2.9). In fact, this gap is considerably larger than in any of the other OECD countries shown in Figure 2.8. The retention rate also tends to be lower for workers with fewer educational qualifications, although this gap narrows for older men. Over time, five-year retention rates have declined slightly for prime-age men and women but increased for workers aged 50-54. This latter trend may be linked to the rise that took place in the legal minimum age for mandatory retirement in firms from 55 to 60 (as discussed in Chapter 4). For workers aged 55-59, there has been a decrease in retention rates from levels that were already quite low. The drop was particularly noticeable in the latter half of the 1990s, which may reflect the poor state of the economy. The rise in retention rates for workers in their early 50s and the decline for workers in their late 50s may indicate that firms have held onto workers past the age of 55 and up to the age of 60, as required by the government, but have shifted some of the burden of employment adjustment onto workers aged 60 and over instead.


65

a

Figure 2.9. Retention rates by age and gender in Japan, 1980-2000 Percentages 1980-1985 100

1985-1990

Men

90

1990-1995 100

Women

90

80

80

70

70

60

60

50

50

40

40

30

30

20

20

10

10

0

1995-2000

0

Ageing and Employment Policies: Japan (Ageing and Employment Policies)

Ageing And Employment Policies Germany (Ageing and Employment Policies)

Ageing and Employment Policies, Spain (Ageing and Employment Policies)

Ageing and Employment Policies: Finland (Ageing and Employment Policies)

Ageing And Employment Policies: Italy (Ageing and Employment Policies)

Ageing and Employment Policies: Norway (Ageing and Employment Policies)

Ageing and Employment Policies: Sweden (Ageing and Employment Policies)

Ageing And Employment Policies: France

Korea (Ageing and Employment Policies)

Ageing And Employment Policies: France

Ageing And Employment Policies: Austria

Ageing and the Labour Market in Japan: Problems And Policies (Esri Studies Series on Ageing)

Ageing And Employment Policies: The Arable Crop Sector (Agriculture, Trade and the Environment)

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The Ageing Brain: The Neurobiology and Neuropsychiatry of Ageing

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Ageing And Employment Policies Germany (Ageing and Employment Policies)

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Ageing and Employment Policies: Finland (Ageing and Employment Policies)

Ageing And Employment Policies: Italy (Ageing and Employment Policies)

Ageing and Employment Policies: Norway (Ageing and Employment Policies)

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Ageing, Spirituality and Well-being

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