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The Need for Policies Targeting Population Aging Rather Than the Elderly
In Japan, senior citizens’ influence on consumption has constantly increased because of population aging. However, consumption is lower in senior households than in working-age households with a breadwinner in his or her 50s, which is the age group with the highest consumption. Though the gap in consumption between senior households and working-age households is not very large, population aging is one factor pushing down household consumption. At the macroeconomic level, population aging is a cause of suppressed consumption worldwide. In Japan, there is an additional factor: population decline. The combination of the two factors. population aging and decline.has slowed the country’s personal consumption growth. Also, today’s working-age generation is facing declining income levels. As this generation with lower incomes grows older, there will be further downward pressure on personal consumption. An economy with an aging population needs not policies targeting the elderly with the aim of boosting their consumption, but rather policies tackling the issue of population aging with the aim of increasing consumption by the country’s households as a whole, including working-age households. In such policies, it is important to increase the income of individuals, but this is not easily attainable through policy. From the standpoint of companies, it is crucial to expect a contraction in consumption in the domestic market and take various measures such as developing and offering products and services that satisfy consumer needs. The needs of the elderly and other consumers constantly change, reflecting generation-specific factors and shifting consumer preferences. Therefore, firms can meet new demand if they are able to capture these consumer trends. Such operational efforts made proactively by firms may show a path to continued growth that the Japanese economy can achieve, overcoming the double hurdles of population aging and decline.