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The Economic Security of Older Persons in Japan By Michiko Mukuno International
Day of Older Persons, October 3, 2002 I
am very honored to have the opportunity to participate in this meeting.
Before all else, on behalf of the Government of Japan, I would like to
express my sincere thanks to all who have worked hard to prepare for this
International Day of Older Persons. Today
I would like to give you an overview of the situation of older persons in
Japan and to tell you about challenges we face and the measures we use
with regard to economic security. Of
all the countries in the world, Japan has the oldest population. In 2002,
23 millions people or 18 percent of the population are age 65 and over. The
number of aged people has increased by 10 millions over the last 15 years.
It is predicted that this segment of the population will increase by
another 11 millions in the next 15 years, for a total of 33 millions, more
than a quarter of the population(P1). This
demographic description may give you a pessimistic impression of the
ageing society in Japan. However, the situation with respect to older
persons in Japan today is not the same as before. On the average, they are
healthy, financially secure and active.
The
average income and savings of older persons is the same as those of
members of working generations. There is no significant difference between
the average annual income of households of elderly and others , broken
down by per household member (P2) Three
quarters of them have no serious health problems affecting their daily
life. One
in five is still in the work force, among the male elderly, one in three
is in the work force (P3). Half
of them are involved in some group activities, and 70 percent of them are
eager to participate in volunteer activities. Let
me show you some photos of them. This is an older woman working in a
factory (P4). These older women are working part-time in a day care
center. Children love them as if they were their own grandmothers (P5).
This is a group of older people starting a new business in the area of
‘care’ technology (P6). These men enjoy making ceramics (P7). This
couple is enjoying social dancing (P8). You can see how active they are. However,
not all the aged are so active. We must not forget that the elderly are a
diverse population. In 2001, the Japanese government formulated, with
reference to the discussions for the Madrid International Plan of Action,
a new version of the General Principles Concerning Measures for the Aged
Society. You may find a copy of this on the desk. In the Principles, we
set as the highest priority “Realization of lifestyle diversity through
support for independence in old age”. You may find detailed measures in
the “Annual Report of the Aging Society: FY2002”, a copy of which is
also on the desk. Now
let me address the issue of economic security of older persons in Japan,
which is the main theme assigned to me today.
The
income of older persons in Japan falls into three categories; earnings,
income from property, and social security benefits (P9). Earnings
play an important role in the overall income of older persons. One person
in five over the age of 65 is still in the work force, and the desirable
retirement age is higher among older persons than among younger persons.
(P10). They work not only for economic reasons but also out of a desire to
participate in society, to promote their health, and to use their spare
time meaningfully. In
response, we are taking measures such as promoting the reemployment of the
elderly, creating a variety of employment patterns or work opportunities,
and supporting business start-ups. We think it necessary to realize in the
future a society in which everyone can work, regardless of one’s age. Concerning
income from property, we are encouraging people to build their assets in
preparation for their old age, and are developing frameworks to enable
them to utilize their assets more efficiently. Among
the three income categories, income from social security benefits is most
essential. The
Public Pension System in Japan consists of the following three types of
pension. 1) The Basic Pension, which is a flat amount and provides
universal coverage based on the contribution made by the insured. It aims
to provide a basic income guarantee for the elderly. Participation is
mandatory for all residents over 20 years of age. 2) Employees’ pension
insurance and some mutual aid associations which provide income-related
pensions on the top of the Basic Pension. Participation is mandatory for
almost all firms. 3) Optional scheme for additional pensions, either
private or public (P11). The
full amount of the Basic Pension is 67,017 yen per month, which is
equivalent to approximately 550 dollars. The standard amount an older
person receives from the Basic Pension and the Employees’ pension
insurance is approximately 60 percent of the annual income he/she earned
while working (P12). Because
of these sources of income, the economic situation of older persons is, on
average, relatively good. However,
we find there is a great difference between the sexes when it comes to the
income of individuals. Women’s income is a third of men’s, and 17
percent of older women are without any income (P13). One
of the reasons is that participation in the Basic Pension was not
mandatory for the wives of employees before 1986. Other reasons are that
even in the case of working women, because they tend to work for a shorter
period and earn less than men , their pensions are lower than men’s. It
is assumed that older women will be covered by their husbands’ pensions.
But the lifestyle of Japanese women has been changing. There are more
working wives, the marriage rate is decreasing and the divorce rate is
increasing. Consequently fewer women will be covered by their husband’s
pension in their old age. To
improve the economic situation of older women is one of the challenges in
the effort to ensure economic security for the elderly. We are making
efforts to enable women to fully exercise their abilities in the
workplace. We are also to
revise the Public Pension System in order to get rid of the negative
effects the system has on women’s choice to work. Another
big challenge is to secure a balance between benefits and contributions
among current and the future generations. In view of the current Public
Pension System, which follows a pay-as-you-go system based on the concept
of intergenerational support, the growing rate of the aged will place
greater burdens on future generations. Japan is already gradually delaying
the age at which an older person is eligible for Employees’ Pension
Insurance from 60 to 65 years. Also, it has begun to lower the level of
benefits for new pensioners. Moreover, we are making efforts to increase
the number of insured by encouraging the employment of women and the
elderly. In
my remarks, I have shown you images of active older persons. As I
mentioned, on average older persons in Japan today are healthy,
financially secure and active. However we must not forget that the older
population is a diverse group. As for economic security, one of the
challenges is to improve the economic situation of older women. Another is
to balance the benefits and contributions among different generations
(P14). To meet those challenges, we are making efforts to realize a
society in which people can fully exercise their abilities and stay active
as long as they wish, regardless of gender and age, I
must conclude my speech here. I sincerely hope that it will be of some
help in implementing the Madrid International Plan of Action in your
countries. Thank
you. Copyright
© 2002 Global Action on Aging
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