Japanese Seniors vol.1

Japanese “Seniors”

Introduction

In an aged society, a big part of its financial resources has to be spent on socially supporting the elderly. Hence, I believe social participation among the elderly, such as working and volunteer activities, is an important and beneficial issue for our society.

When Japanese people talk about “the elderly,” we usually mean “people aged 65 and over.” In the meantime, a number of corporations set a mandatory retirement for their employees at age 60, and those retirees are often considered “the elderly.”

In the previous report, I wrote about the elderly population in Japan. I mostly talked about those aged 65 and over, but readers from other countries requested additional information on people aged 55 (or 60) to 64, or Japanese “seniors”. I agree on the importance of this age group and would like to give an overview.

Working Status of Seniors

A mandatory retirement was normally set at age 55 in Japan between 1920s and 1980s. The life after a mandatory retirement was considered as being “the elderly.” A mandatory retirement age started rising in 1980s. Promotion for early retirement, which was often discussed in European countries, did not take place in Japan.

As of the beginning of the 21st century, employment rates for those aged 55 to 59 are about 94% for males and about 59% for females. Rates for those aged 60 to 64 are about 72% and 39.5% for males and females, respectively. For people aged 65 and over, employment rates are about 33% for males and about 14% for females.

It is often said that employment rates of the elderly are higher in Japan than in other countries. Although rates are quite high for those aged 60 to 64, it is not so for those aged 65 and over. The high employment rates of the Japanese elderly may be partly pushed by the society, for East Asian countries have strong work ethics. In Japan, where a mandatory retirement age is normally set at age 60, many corporations keep or rehire their employees after a mandatory retirement, resulting in higher employment rates among seniors.

It is estimated that about 10 million out of 30 million Japanese people aged 60 and over are working at the beginning of the 21st century. Excluding the number of people who need care, about 15 million seniors are not working but having a variety of life styles. While the working-age (15-64) population has been declining in Japan, the number of the elderly (both aged 60+ and 65+) is increasing rapidly. Baby-boomers will be in their 60s by 2010, and our society needs preparations for the population aging including those baby-boomers. Hence, working and social activities among the current seniors are of great interest.

Japanese Seniors vol.2

Figure 1 presents the total Japanese population and people in labor force (including those who work and who want to work) in 1970 and 2000. By the way, the percentages of people aged 65 and over were 7% in 1970 and 17.5% in 2000.

In 1970, the labor force participation rates of both young (aged 15 to 19) and older (aged 60 and over) people were quite high. By 2000, very few young people were in labor force, and labor force participation rates also declined considerably for older people.

The working-age population (aged 15-64) started declining in late 1990s, but the actual population in labor force has been declining faster.

Figure 1 Pyramids of Total Population and People in Labor Force in Japan

It is believed that the spread of a mandatory retirement system and the public pension system have resulted in lower labor force participation of those aged 60 and over. However, as the eligibility age for the public pension will be gradually postponed to age 65, labor force participation of the Japanese seniors may change in the near future.

Japanese Seniors vol.3

Mandatory Retirement

A mandatory retirement system emerged in Japan during 1920s, when the country experienced industrialization which created a number of employees who work within a time frame. At that time, a mandatory retirement was normally set age 55. Because the average life expectancy was about 45 years combining males and females, people (especially males) had less than 10 years of post-retirement lives. Corporations in a wide variety of fields set a mandatory retirement at age 55 until 1980s. Table 1 shows labor force participation rates of people aged 50 and over in 1970 and 2000.

Table 1 Labor Force Participation Rates in Japan by Sex and Age [%]
50-54 55-59 60-64 65+
Male
1970 95.8 91.2 81.5 49.5
2000 96.7 94.2 72.6 34.1
Female
1970 58.8 48.7 39.1 17.9
2000 68.2 58.7 39.5 14.4
<Statistics Bureau, Labor Force Survey>

It is said that role divisions by gender in Japanese labor market were established in 1970s. In other words, men work outside and women do housework such as chore and child-rearing. In labor statistics, full-time housewives are considered “not in labor force.”

As shown in Table 1, labor force participation rates of males show a gradual decline with age in 1970. Even for those aged 65 and over, the rate was quite high (49.5%). In 2000, although 94.2% of men aged 55 to 59 stayed in labor force, the rate was 72.6% for those aged 60 to 64, and 34.1% for those aged 65 and over. In these 30 years, the rate increased by 3% for those in late 50s, but it declined by 9% for those in early 60s.

Such changes in labor force participation may be results of postponement of the retirement age from 55 to 60 as well as the rising public pension eligibility age.

In 1980, Japan made a law and set a mandatory retirement at age 60. The average life expectancy of males was over 74 years by then. Employers were asked to raise their mandatory retirement gradually to age 60. The Law Concerning Stabilization of Employment of Older Persons, which focused on people aged 55 and over, was revised in 1994, requiring that employers set a mandatory retirement at age 60 or higher starting in 1998. In 2000, the government called for further revisions of corporate employment systems in the next 10 years, so that those who wanted to stay in labor force ccould do so until age 65. In 2004, the law was revised again, requiring that all employers raise a mandatory retirement age to 65 or higher by 2013.

Several administrators say that the government’s role is almost over regarding establishment of mandatory retirement systems. Nonetheless, the average life expectancy of Japanese males is already 78 years, and their health expectancy is 72 years. More than 70% of Japanese citizens think “Elderly people are those aged 70 and over.” In a society where one in every 5 Japanese people is aged 65 and over, a mandatory retirement at age 65 may still be temporary. Although the national government puts pressure on employers, raising a retirement age may not be feasible for some jobs. Hence, Japan should establish a law like the Age Discrimination in Employment Act in the United States.