This month's featured article
From the Perspective of Ensuring Fiscal Soundness: Recovery through structural reforms
KITAO SagiriFaculty Fellow, RIETI
The fiscal tightening resulting from the low birthrate and the aging population and the steady increase in social security spending will continue for several decades and has become an issue that needs to be addressed from a long-term vision. Detailed inspections of government spending and review of tax items at the yearly fiscal soundness discussions are extremely important. However, such discussions are clearly not keeping up with the massive scale and the rapid speed of the aging of the population (See Figure). The key to regaining fiscal discipline will be the increase in household income underpinned by improved productivity and social security reforms that will reinforce such channels. This article will discuss policies to ensure medium- to long-term growth and fiscal soundness.
While the eligibility age (65 years old) for national pension benefits in Japan has not changed since the universal pension was first adopted in 1961, the average duration of receiving benefits has increased from three years to approximately 20 years in conjunction with the continuing rise in average life expectancy. The burden of continuing the national pension plan continues to grow, and employee pension premiums on earnings, which are paid equally by employers and employees, rose from 3.5% in 1961 to 18.3%. With the addition of medical and nursing care expenses, there is little room for the working population to bear any additional fiscal burden.
To read the full text
https://www.rieti.go.jp/en/papers/contribution/kitao-sagiri/01.html
Recent articles on RIETI's website
"The Challenges Ahead for ‘Future Design’ Studies" by KOBAYASHI Keiichiro (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/kobayashi/67.html
"Points of Discussion Concerning the Strategic Energy Plan: Toward policy measures to take advantage of the market mechanism" by ITO Koichiro (Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/ito-koichiro/03.html
Event Information
Fellow titles and links in the text are as of the date of publication.
For questions or comments regarding RIETI Report, please contact the editor.
*If the "Send by mailer" button does not work, please copy the address into your email "send to" field and connect the prefix and the suffix of the address with an "@", sending it normally.RIETI Report is published bi-weekly.