Future Change of Old-Age Dependency Ratio in Japan Relating to the Public Pension

Futoshi Ishii, National Institute of Population and Social Security Research, Japan

The purpose of this paper is to discuss the future change of old-age dependency ratio in Japan relating to its demographic impact on the public pension scheme. First, we review the relation between Japanese public pension scheme and old-age dependency ratio. Then, we review the population projections of Japan and old-age dependency ratio with various assumptions. Next, we analyze the changes of the old-age dependency ratio using variable-r method. Finally, we propose a new definition of the old-age dependency ratio applying equivalent retirement age, and compare with usual old-age dependency ratio. To deal with future increase of the old-age dependency ratio, it would be important to discuss not only macro viewpoint but also life course viewpoint such as equivalent retirement age. Therefore, it would be desirable to take some action immediately that people could live healthier and work longer to cope with prolonging life expectancy.