People aged 50 or older and out of the workforce in Japan could increase by 29 percent from 2018, to 59 per 100 people, by 2050, straining public retirement schemes, the OECD said in a recent report that suggested reforms are needed.
The Organisation for Economic Co-operation and Development’s report, Working Better with Age, which came out last week, said Japan could slow the expected growth to 5 percent if it delayed in the average age at which older workers leave the workforce as well as reducing the gender gap in its labor force.
In comparison, the OECD’s average rate for those aged 50 and older without jobs who need to be supported by each worker could jump 39 percent from 2018 by 2050, while implementing reforms could lower the projected rise to 9 percent.
Tokyo has room to improve even though it performs above the OECD average, in terms of incentives for people to work longer, job opportunities at an older age and employability of elderly workers, the report said.
At a Tokyo news conference, Stefano Scarpetta, the OECD’s director for employment, labor and social affairs, described Japan as “paradoxical” for having high-competence workers but low utilization rates.
“Some of the competence that women have is not fully exploited, as well as some of the competence of the older workers,” he said.
The labor participation rate for women aged between 25 and 54 in Japan was just under 79 percent last year, well below the rate seen in a number of other advanced OECD nations.
Scarpetta said one of the country’s main challenges was creating better job opportunities for those aged 60 to 65, as those who retire and leave their previous employers often find themselves in nonregular jobs with only a fraction of their former pay, and usually suffer poor working conditions.
He said the group is a “waste value” whose experience and knowledge, acquired over the years, could be used to promote economic growth and boost society’s well-being.