How Japan and the US can Reduce the Stress of Aging

In this paper, the author simulates the Dependency Ratio (DR) under various conditions and makes comparisons with the US. Japan has experienced a large increase in its DR because its fertility rate is low, its people are long lived and it has little immigration. Fertility is the largest of the contributors in Japan. If there are no demographic changes in Japan, the DR will be 0.88 by 2050. It also assesses the role of the “baby boom” of the late 1940s and shows that it was compensatory, unlike that in the US. The good news is that healthier older longer-lived people will continue to be employed for many more years than previously and that is one way to reduce demographic stress. [Working Paper 22445]