Paper short abstract:

This paper investigates to what extent the family serves as a bulwark against generational conflict in aging Japan and Germany. Discussing welfare and family regimes, hypotheses are tested using the latest two waves of National Transfer Accounts macrodata. Japan's prospects are direr than Germany's.

Paper long abstract:

Various works have argued that population ageing, leading to higher dependency ratios, provokes generational conflict in terms of a battle over scarce resources. But while in numerous post-industrial economies, the younger cohorts are put at a comparative disadvantage through the labour market and the public sector, there has also been the tendency to alleviate these imbalances through informal downward transfers in the family sphere. Comparing Japan and Germany, two pioneers of ageing, this paper investigates whether and to what extent the family as an institution can serve as a bulwark against generational conflict. Discussing their demographic positions in the context of OECD countries as well as their welfare regimes, family traditions and policies causing welfare transition processes in either country, the results are also relevant for a wider set of countries facing population ageing. As a commonality, financial pressure on the individual has increased in the last years due to changes in living arrangements, income levels and liberalising welfare policies. While this pressure has been stronger in Japan, the family policy response has been more comprehensive in Germany. The traditional role of the family, though, is even stronger in Japan than in Germany. According to typologies of Esping-Andersen (1990) and Shinkawa (2013), Japan's welfare and family regimes are found to be transitioning rather towards a liberal market-oriented type. Germany's transition includes social-democratic and liberal elements. Departing from the logic of Brumberg and Modigliani's (1954) lifecycle model and Mudrazija's (2014) extension with overlapping generations and different welfare regimes, hypotheses are tested using the two most recent waves of National Transfers Accounts (2004 and 2009 for Japan, 2003 and 2008 for Germany), a macro-database of intergenerational financial flows adhering to the methodology of national accounting. The data show that while the individual income deficit over the lifecycle has increased, the elderly serve as a safety net for more precarious younger cohorts in both countries. At the same time, individual assets such as savings are increasingly more important. Considering demographic and household-financial dynamics and policy responses, it turns out that Japan's prospects for the family as a safety net are direr than Germany's.

Paper short abstract:

Foreign pundits often identify a more open immigration policy as a missing element in Abenomics. However, admission policy reforms are actually an element of Abenomics. This paper will analyze the background of these immigration reforms and discuss their possible impact on Japan's labor market.

Paper long abstract:

In view of Japan's aging population and future labor shortage, foreign pundits and commentators have often identified a more pro-active and open immigration policy as a missing element in Abenomics. Abe himself has been seen as a prime representative of an ethno-nationalistic establishment that is not prepared to overcome Japan's self-perception as an ethnically homogeneous society and is missing another opportunity to steer Japan into a brighter future of economic dynamism and renewed growth. However, while Abe is surely not a passionate prophet of more open borders and of increasing Japan's intake of foreign workers, admission policy reforms are actually an often overlooked element of Abenomics. The foreign trainee system has been substantially reformed and a new system for foreign domestic workers and nannies is tested in a number of Japan's special economic zones (keizai tokku). These reforms have not only to be qualified as structural reforms, but are in fact the largest reforms in admission policy since the reform of the immigration law and the introduction of a new foreign trainee system around 1990. Moreover, while these reforms of around 1990 seemed very limited at the time, they led to significant new immigration flows and completed Japan's transformation into a new immigration country. Hence, the impact of Abe's reforms in immigration policy could potentially be much larger than on first impression.

This paper will analyze the background of the immigration reforms under Abenomics and discuss their possible impact on Japan's immigration flows and its labor market. It will show that Japan's admission policy making and recent structural reforms are not simply based on ethnic nationalism, but on a much more complex ideational and institutional policy making. It argues also that Abe has a good chance to go together with his predecessor of the 1980s, Nakasone, into the history of Japan's immigration policy as the two political leaders, which are undoubtedly prime examples of Japan's ethno-nationalists, but still opened up Japan to immigration and foreign workers like no other Prime Minister of the postwar era.

Paper short abstract:

This paper examines the 'New' Abenomics and Japan's Plan for Dynamic Engagement of All Citizens by focusing on the proposed labour market reform. The paper claims that, although the reform may be aimed at improving work conditions, it is more about economic growth based on economic nationalism.

Paper long abstract:

This paper examines the question of what changes have occurred in Abenomics by focusing on the labour market policy and why the Abe administration introduced these changes. The Abe administration announced the 'New' Abenomics in September 2015 and introduced the mostly identical 'Ichioku Sōkatsuyaku' Plan (Japan's Plan for Dynamic Engagement of All Citizens) in June 2016. In addition to the three arrows of the original Abenomics (the monetary policy based on quantitative easing as the first arrow, the fiscal policy based on large public spending as the second arrow, and the structural reform based on neoliberal deregulation as the third arrow), which were combined as the first new arrow aimed at GDP 600 trillion yen, the new Abenomics added two new arrows, with social policies aimed at the higher fertility rate and the lower number of workers who leave job because of elderly care (kaigo rishoku) as the new second and third arrows. As for the labour market reform related to these new three arrows, the Abe administration has proposed to place a limit on overtime work by revising Article 36 of the Labour Standards Law and improve the working conditions of non-regular workers by introducing 'equal pay for equal work' and raising the minimum wage. However, we can identify a contradiction between this reform and the labour market policy such as the deregulation of temporary agency work in 2015, which has made the work situation of temporary agency workers more unstable. In addition, despite being useful for striking a better work-life balance and increasing women's labour market participation, the reform of working hours aimed at reducing overtime and improving labour productivity may result in a structural reform that would contribute to working-time deregulation aimed at lower labour cost. The paper claims that these reform measures are not only about improving work conditions but also about achieving economic growth. The New Abenomics and the Japan's Plan can be characterised a policy based on economic nationalism as part of the Abe administration's grand strategy for revitalizing the economy and achieving Japan's greater role and competitiveness in the global political economy.