Managing pensions in the twenty-first century: global lessons and implications for Japan

As the twenty-first century dawns, global changes in pension structures are attracting keen interest from economists, demographers, and politicians. These pension changes are driven in part by rapidly-growing numbers of people aged 65 and older, an aging phenomenon that will have numerous positive as well as negative economic and social consequences. Nowhere is this set of economic and social challenges more salient than in Japan. This nation leads the globe in world aging, with its population recording the longest life expectancy patterns and among the lowest fertility rates in the OECD. This aging phenomenon, combined with recent economic stagnation, has begun to lead many to question how retirement can be financed in the future. Testament to this concern is a recent survey showing that over 90 percent of Japanese consumers were worried about the inadequacy of their own saving for retirement (Business Wire 1999).