The future of Japan’s Long-term Care Insurance Program
Satoshi Shimizutani, 12 September 2013
Policymakers in the developed world are fretting over how to care (and pay) for their ageing populations. This column unpacks the thinking behind Japan’s extensive Long-term Care Insurance Program, arguing that there are too many sweeping assumptions about the elderly and how they behave. So how can we best design policy for long-term care? As ever, it is only from well-funded and comprehensive datasets – such as the Japanese Study on Aging and Retirement, now in its fourth year – that effective policy will come.
The debate of social-security-system reform in Japan is now entering a crucial stage.
Topics: Health economics, Welfare state and social Europe
Tags: Ageing, care, Japan
Fiscal consolidation and implications of social spending for long-term fiscal sustainability
Rossana Merola, Douglas Sutherland, 31 March 2013
During the economic and financial crisis, fiscal positions across OECD countries deteriorated sharply. This column agues that population ageing and trends in social spending will further challenge the sustainability of fiscal balances. Research suggests that the scale of fiscal consolidation that will be needed to ensure long-term sustainability is large, but policymakers can look at the potential benefits of policy reform in mitigating budget pressures.
Predicted demographic developments over the coming decades are well known. Due to low fertility rates and rising life expectancy, OECD nations will see a ‘greying’ of their populations. The fiscal implications have been widely discussed (Kotlikoff 2012).
Topics: Monetary policy, Poverty and income inequality, Welfare state and social Europe
Tags: Ageing, fiscal policy, pensions
Eurozone: Looking for growth
Laurence Boone, Céline Renucci, Ruben Segura-Cayuela, 25 March 2013
What happens after the crisis ends? This column estimates the long-term effects of the current cyclical downturn on Eurozone economies. In the absence of any real impetus for bold reform, estimates show that the damage will indeed be long lasting, permanently impairing growth for an ageing population that requires higher growth capacity more than ever before.
The financial crisis that erupted in 2008, prolonged by a sovereign crisis in the Eurozone, led to a massive contraction in trade, as well as in investment in physical and human capital; thus undermining the foundations of future growth. This may well continue as growth will not rapidly rebound while deleveraging slowly proceeds across Eurozone economies.
Topics: Europe's nations and regions, Productivity and Innovation
Tags: Ageing, Eurozone crisis, growth, productivity, Solow
Public investments for long-term economic growth: the case of health
Michael Stolpe, 22 March 2013
The crisis has shot holes in government budgets devoted to pro-growth public goods. This column argues that health-related public goods support long-term economic growth. Governments may be more inclined to focus on spending related directly to jobs, such as education and welfare-to-work programmes, but health should not be forgotten
Crisis or not, healthcare cries out for large-scale public investments that lock in what appears to be an historic trough in government borrowing costs in many of the world’s advanced countries.
Topics: Health economics
Tags: Ageing, Europe, investment, Japan, US
Things we must consider in shaping Japanese economic policy for the future
Keiichiro Kobayashi, 10 February 2013
Japan is under new leadership, bringing fresh attempts to tackle deflation. This column argues that the lessons we can learn are Going forward, a change of party politics with every change of government will likely become a recurring event in Japan. In order to restore people’s confidence in the fiscal management and social security system in the light of that prospect, institutional systems should be designed in a way to allow flexibility, premised on the fact that the government cannot make commitments into the remote future. Political leaders – whether they belong to the ruling or opposition parties – need to come up with new ideas toward achieving that end.
With the Japanese government now under the stewardship of Prime Minister Shinzo Abe, Japan is set to pursue economic policy that calls for bold monetary easing in order to end deflation.
Topics: Institutions and economics, Politics and economics
Tags: Ageing, Japan, policymaking
Ageing – saving or working more?
Torben M. Andersen, 6 January 2009
How will the shrinking labour force pay for the pensions and healthcare of the growing elderly? This column argues that linking retirement ages to longevity would alleviate a significant part of the deterioration in public finances and ensure that the burden of adjustment is carried by those gaining from increases in longevity.
Most countries face an ageing problem, as the elderly (65+) population increases relative to working age population. Driving this demographic shift are the baby boomers’ retirement and increases in longevity. Public finances will be strained as more persons depend on pension expenditures and old-age care, while a stagnating or shrinking labour force produce matching revenues.
Topics: Labour markets, Welfare state and social Europe
Tags: Ageing, demographic change, fertility, longevity