1st Edition
The Japanese Economy Strategies to Cope with a Shrinking and Ageing Population
Japan has many unique strengths, but it also faces numerous challenges, many of which are related to population ageing. Rapid demographic change is projected to reduce Japan’s population by one-quarter by 2060 while increasing the share of elderly people from 29% of the total population to 38%, which would be the highest share among advanced countries. This book analyses the Japanese economy and the challenges it faces, and suggests policies to promote wellbeing, high living standards, fiscal sustainability, social inclusion and environmental sustainability. The book’s 24 chapters focus on key aspects of Japan’s economy, including the labour market, innovation, education, women in the workforce, corporate governance, small and medium-sized enterprises, the service sector, agriculture, fiscal and monetary policy, income distribution and policies to address climate change.
The volume aims to increase understanding of Japan, the world’s third-largest economy and a key player in the global economy. It will assist policymakers and serve as a resource for academics and students of economics and public policy. As Japan is a front-runner in population ageing, the book’s analysis and policy recommendations are highly relevant to other countries that are, or soon will be, facing similar challenges.
The Author
Preface and Acknowledgements
Acronyms and Abbreviations
- From the collapse of the bubble economy to the COVID-19 pandemic: an overview of the Japanese economy from 1990 to 2020
- Key challenges facing Japan
- Expanding the use of foreign workers and raising the fertility rate to cope with demographic challenges
- Extending the careers of older persons
- Promoting employment and leadership opportunities for women
- Improving the innovation framework to boost productivity
- Advancing the digitalization of Japan to raise productivity and well-being
- Reforming the education system and increasing human capital
- Strengthening the integration of Japan in the world economy to benefit more fully from globalization
- Accelerating regulatory reform to strengthen competition and boost productivity
- Upgrading corporate governance to revitalize the Japanese economy
- Improving the insolvency regime to improve resource allocation
- Making small and medium-sized enterprises a driver of growth and innovation
- Enhancing productivity in the service sector
- Upgrading productivity in the agricultural sector
- Financial sector reforms to promote growth and financial stability
- Improving the fiscal framework to ensure long-run fiscal sustainability
- Providing universal high-quality healthcare while controlling spending
- Consolidation of local government finances in tandem with the central government
- Reforming Japan’s tax system
- Monetary policy: unconventional measures to achieve the inflation target
- Reducing income inequality and poverty to promote social inclusion
- Reforming the energy sector to achieve green growth and stop climate change
- Summary: addressing Japan’s economic and demographic challenges
Part I Labor market reform to sustain economic growth and promote social inclusion
Part II Raising productivity to sustain living standards in the face of a shrinking and aging population
Part III Improving performance in key sectors
Part IV Macroeconomic policies to promote economic growth and fiscal sustainability
Part V Enhancing well-being
Part VI Summary
Biography
Randall S. Jones is a professional fellow at Columbia University’s Center on Japanese Economy and Business and a non-resident fellow at the Korea Economic Institute. Previously, he served as the Senior Counsellor for East Asia and as head of the Japan/Korea Desk at the Organization for Economic Co-operation and Development (OECD) in Paris from 2002-19.
"This is an excellent, comprehensive, balanced, readable, up-to-date policy-oriented analysis of the Japanese economy and its fundamental challenges by an outstanding expert. Given Japan’s declining and aging population and labour force, Randall Jones provides sensible, clear-cut, specific policy recommendations to improve productivity and well-being through needed reforms."
Hugh Patrick, R. D. Calkins Professor of International Business Emeritus, Columbia Business School
"Randall Jones offers the best economic survey on Japan, full of deep policy insights. Reviewing developments from the bubble burst in 1990 to the current COVID-19 crisis, his book provides key challenges and solutions for Japan as a frontier country with a policy agenda for an ageing society with a shrinking population."
Kazumasa Iwata, President of the Japan Center for Economic Research, Professor Emeritus Tokyo University
"A tour de force! Comprehensive comparisons of Japan with many nations, across many issues, with reliable data. This is the new book of record for Japan’s achievements and missteps in labour, tax, technology, industrial policy, demographics, education, and other policy fields. A cornerstone work for scholars, policymakers, and investors."
Robert Alan Feldman, Professor, Tokyo University of Science
