Year
2026
Abstract
Population ageing poses major fiscal and macroeconomic challenges for OECD countries. Japan, the most rapidly ageing economy, offers a natural laboratory to study the aggregate effects of extending working lives. Using quarterly data over the period 1975Q1–2022Q4 and structural VAR models, we estimate the dynamic impact of shocks to the labour force participation of older workers. We find that higher participation has no significant effect on GDP per capita but improves the fiscal balance, while also being associated with a decline in average labour productivity. Moreover, the results reveal complementarities across both age and gender: increases in older workers’ participation are accompanied by higher participation and employment among younger cohorts, as well as a strong positive participation response among older women following an increase in older men’s participation.
D’ALBIS, H., SALEM, M.B. et BOUBTANE, E. (2026). Extending working lives in Japan: Evidence and lessons from an outlier. Journal of the Economics of Ageing, 34, pp. 100643.
Keywords