The demand for and supply of elderly care in Japan

Abstract

Japan is the most aged society in the world. Population aging is one of the greatest challenges the Japanese economy will face during the first half of the 21st century. Because of the aging population, an increasing number of people are unable to live without the support and care of others. In 2000, to manage the challenges brought by the rapid growth in the elderly population, the Japanese government introduced the long-term care insurance system. Before then, the task of caring for the elderly was mainly carried out by their families and hospitals. The introduction of long-term care insurance enabled the development of the care industry. Even with the development of professional care services, however, the burden of caring for the elderly on their families has been increasing. Some caregivers gave up working, and many others shortening their working hours. The present study estimates that, in 2019, the Japanese economy lost 2 percent of its working hours from workers leaving or reducing their workload to provide care for a family member. Given the increasing number of elderly people in Japan, it is highly likely that the Japanese people will need to sacrifice even more working hours for caregiving in the future. The present study forecasts that 3.9 percent of total working hours will be lost for providing care in 2065. The loss of working hours can be avoided or reduced through further development of the long-term care insurance system and care industry. However, the development needs the support of the general public through higher premiums and more government subsidies.