Chapter

Does Social Security Induce Withdrawal of the Old from the Labor Force and Create Jobs for the Young?

Takashi Oshio, Satoshi Shimizutani and Akiko Sato Oishi

in Social Security Programs and Retirement around the World

Published by University of Chicago Press

Published in print April 2010 | ISBN: 9780226309484
Published online February 2013 | e-ISBN: 9780226309507 | DOI: http://dx.doi.org/10.7208/chicago/9780226309507.003.0008
Does Social Security Induce Withdrawal of the Old from the Labor Force and Create Jobs for the Young?

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The rapid pace of population aging has raised concerns about the sustainability of the current programs and stimulated a series of major pension reforms since the mid-1980s, which called for a rise of eligibility ages, a reduction of benefit levels, and a rise of contribution rates. These reforms are likely to have affected the labor supply of the elderly and possibly of the nonelderly. This chapter examines whether social security programs in Japan induce withdrawal of the elderly from the labor force and create jobs for the young and provides a historical overview of social security reforms and employment policies toward the elderly. It presents the long-term employment and unemployment trends of both the old and the young and performs a regression analysis to examine the direct relationship between the employment of the young and that of the old. Changes in social security programs associated with the employment of the young or the old are analyzed using measures for the inducement to retire. The findings confirm that there is no serious trade-off between the old and the young in the labor force.

Keywords: population; aging; employment policies; labor force; young; social security

Chapter.  8861 words.  Illustrated.

Subjects: Public Economics

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