Edited by Toshiaki Tachibanaki
Chapter 2: Social security reform in Japan in the twenty-first century
2. Social security reform in Japan in the twenty-ﬁrst century Toshiaki Tachibanaki 1. INTRODUCTION One of the most serious social and economic problems facing Japan in the twenty-ﬁrst century is the ageing trend in the age–population structure. In particular, it has a serious eﬀect on the social security systems for pensions, medical insurance, old-age caring, growth rate of the economy and so on. The purpose of this chapter is to examine the pension program that supports a comfortable standard of living for the aged. The ageing trend is likely to reduce the pension beneﬁt level if the current pay-as-you-go system is retained without any modiﬁcation. This author believes that it is important not to reduce the beneﬁt level because the public pension beneﬁt is the major source of income for the aged. By maintaining the present beneﬁt level, the elderly will not have to face uncertainty and anxiety concerning their standard of living. The chapter presents two major policy reforms to support this assertion. The ﬁrst is to switch the public pension system from the current pay-as-you-go method to the tax ﬁnancing method at least for the basic part of the beneﬁt, and the second is to allow ﬁrms to withdraw from welfare provision programs. 2. CHARACTERISTICS OF WELFARE PROVISION IN JAPAN IN COMPARATIVE PERSPECTIVE 2.1. Japan Is Not a Welfare State Japan has never been a welfare state, according to various criteria of welfare provision. The United States and...
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