The Organisation for Economic Co-operation and Development (OECD) on Monday warned of the risks Japan faces due to its ageing population. In 2017, there were 50 Japanese people aged 65 per hundred, while the rest were aged between 20 to 64, and this ratio is projected to rise to 79 per hundred in 2050, according to a report presented by OECD Secretary General Angel Gurria here. "Half of the children born in Japan in 2017 are expected to live...
The financial industry has jumped on the impact investing and environmental, social or governance—or ESG—bandwagon. But Hiromichi Mizuno, the man who oversees $1.6 trillion in the world’s largest public pension fund, says true believers on Wall Street are still hard to find, so he is taking his own steps to push ESG and impact investing off the sidelines. As chief investment officer of Japan’s Government Pension Investment Fund, Mizuno requires his asset managers to integrate ESG into their investment...
Some economists expect the average pension-to-wage ratio to keep deteriorating and worries are growing that Japan's 'pay-as-you-go' pension scheme may be unsustainable Yasuhiro Furuse could have retired two years ago, but he wasn’t entirely happy with his pension income and had to put any such thoughts to bed.It was just as well for Furuse’s employer Orix Corp, a financial services group, which would have struggled to find a replacement, with Japan’s jobless rate at 26-year lows. This win-win arrangement, increasingly common...
Prime Minister Abe’s recent visit to the UK was a chance for the two countries to talk about common issues affecting their future. Let’s hope one of the topics they discussed was how to deal with an ageing society. In the 1970s and 1980s the world looked to Japan to learn about lean manufacturing. After the 2007-8 global financial crisis it looked to Japan to see how to deal with the aftermath of a financial crisis. Japan is a...
By Richard K. Green (University of Southern California - Lusk Center for Real Estate) & Linna Zhu (USC Sol Price School of Public Policy) This paper examines the feasibility of reverse mortgages in Japan by utilizing stochastic modeling to characterize the movements of three stochastic variables—interest rates, property values and mortality—underpinning the value of reverse mortgages. We use the yield curve to forecast future interest rates, taking into account the interest arbitrage condition and the term premium. We employ hedonic...
By Minchung Hsu (National Graduate Institute for Policy Studies (GRIPS)) & Tomoaki Yamada (Meiji University - School of Commerce) We construct a transition analysis based on a general equilibrium life‐cycle model to investigate the effects of aging, and we evaluate various policy alternatives designed to lessen the negative influence of aging. In particular, we analyze reforms of insurance benefits and tax financing tools that were recently the focus of a great amount of attention and debate in Japan because of...
The Abe administration emphasizes the arrival of the “100-year life,” and the government envisions labor market reforms that meet the needs of a society in which people live much longer than past generations. While elderly people will need to have more money to cover the expenses of living longer, the policies that address this issue are not being seriously discussed by the government. Given the growing length of post-retirement life, will people still be able to heavily depend on...
The latest population estimate by the Health, Labor and Welfare Ministry, released late last month, points to the accelerating decline of Japan’s population with ever fewer births. The number of babies born in this country in 2018 is estimated at 921,000 — down 25,000 from the previous year and falling short of 1 million for the third year in a row. The lowest annual number of births on record since the government began taking comparable statistics in 1899 was...
“What’s a microwave?” she asked her husband, Eiichi. Yumiko was in the early stages of dementia, struggling with vocabulary and unable to teach the kimono-dressing classes she had run for 25 years. The difficulty with everyday tasks has made life challenging for her and Eiichi, who has been caring for her since 2008. But she is also unable to deal with her finances - a situation that experts say is increasingly common in fast-ageing Japan and that puts trillions of yen worth...
AI will transform the way Japan’s ¥158 trillion ($1.4 trillion) Government Pension Investment Fund (GPIF) to select and monitor its asset managers. The world’s biggest pension fund, which outsources all its investment management, announced plans last year to use AI to better scrutinise its poorly performing active managers. Since then, AI specialists Sony Computer Science Laboratories and GPIF have developed a proof-of-concept prototype that uses deep learning to study manager styles and strategies. The latest progress report on the project promises...
