111th Pension Mathematics Subcommittee Meeting Minutes
Overview
The 111th meeting of the Social Security Council’s Pension Mathematics Subcommittee addressed employment conditions and attitudes from younger to senior generations as assumptions relevant to projections of pension finances. It featured keynote presentations by Hisashi Yamada and Yukie Hori, followed by an exchange of views. The presentations covered labor shortages, productivity and employment mismatches, senior and foreign workers, generative AI, the careers of young people and the employment ice age generation, and marriage, childbirth, and family formation. Discussion topics included labor mobility and reskilling, wages and labor’s share, freelancers, unpaid care work, and the pension system.
Key points
- The subcommittee’s agenda was “Employment conditions and attitudes across generations, and pension finances.”
- Yamada explained that low productivity and mismatches in employment underlie labor shortages.
- Hori described the employment ice age generation’s challenge as unstable careers that move between regular and non-regular employment, unemployment, and being out of work.
- The exchange of views addressed disparities in unpaid care work and how continued employment relates to income and pensions.
Overview
The subcommittee met in an online seminar streamed by video and held presentations by external speakers followed by discussion with members. The subject was employment trends and attitudes across generations, an important assumption for projections of public pension finances. Topic selection also took into account points raised in the peer review of the 2024 actuarial valuation concerning women’s and older people’s labor force participation and labor’s share, as well as marriage and childbirth among younger generations, foreign employment, and AI’s effects on employment.
Starting with employment trends overall, Yamada discussed senior employment, foreign employment, and the effects of new technologies on jobs. Hori explained young people’s working styles and attitudes, the current situation of the employment ice age generation, and trends in marriage, childbirth, and families. The second half’s exchange of views proceeded under two themes: “The future of the labor market” and “Changes in work and family formation from young to middle age, and the pension system.”
Impact
The subcommittee chair said the presentations and discussion among members would serve as a reference for consideration in future peer reviews of actuarial valuations.
Details
Yamada said that the labor force is growing while labor shortages are worsening. He described a tendency for shortages to be more acute in less productive industries, as well as mismatches between people seeking work and job openings. These mismatches involve both skills and working conditions; overall, he said, working conditions are the main factor. Senior employment is increasing amid policies to secure jobs, longer healthy life expectancy, and labor shortages, but quality-related challenges remain, including post-retirement wage declines and motivation. On foreign employment, he mentioned the introduction of specified skilled worker status and a system review shifting from technical intern training to employment for skill development, identifying skills development and systems for welcoming foreign workers as members of society as issues. He said AI may replace or complement jobs depending on the occupation, and that improving productivity in workplaces involves using digital technology, developing skills, and determining how labor’s share is distributed.
Hori explained that Japan’s system of hiring new graduates in a single annual cohort helps keep youth unemployment low. She reported that the share of young people in regular employment had risen, while the share of people who were not working and not seeking work had increased. For the employment ice age generation, she described not only difficulty finding work upon graduation but also careers that continued to shift between employment types; even those now in regular employment face income disparities and challenges related to pension enrollment. On marriage and family formation, she explained that women are increasingly continuing to work after childbirth, while unequal burdens of housework and childcare may affect careers, income, and pensions. She also discussed childcare support through the pension system and issues surrounding the Category III insured-person system.
The exchange of views with members covered employment relationships among seniors, foreign workers, and the current workforce; real wages and labor’s share; employment through age 70; employees’ pension benefits while working; pension coverage for freelancers; job changes and wages; continued employment among the employment ice age generation; and pension system responses to unpaid care work. The speakers also identified reskilling, standards for the treatment of mid-career hires, and system responses to diverse working arrangements, including freelancing, as issues.