Column Finance and the Social Security System 2021.07.14
【Aging, safety net and fiscal crisis in Japan】No.315:Between now and 2030, the population of people aged 75 and older will increase rapidly, while those between 65 and 74 years old will decrease.
In this column series, Yukihiro Matsuyama, Research Director at CIGS introduces the latest information about aging, safety net and fiscal crisis in Japan with data of international comparison
The Ministry of Internal Affairs and Communications reported that as of January 1, 2021, the population amounted to 125,630,000 people, which was 358,000 less than a year ago. Figure 1 shows the population changes of three age groups (64 years old and younger, 65 to 74 years old, and 75 years old and older) every 5 years based on estimates made by the government in 2017. The population of people aged 64 years and younger is projected to decline by 3,642,000 between 2021 and 2025, and the scale of this decline will increase to 5,687,000 between 2035 and 2040. Changes in the elderly population are the opposite between the 65-74 group and the 75 and older group. In fact, from 2021 to 2025, the group of those between 65 and 74 years old will decrease by 2,547,000, whereas the group aged 75 and older will increase by 3,103,000. From 2025 to 2030, the former group will decrease by 696,000, while the latter will increase by 1,084,000. However, from 2030 to 2035, the former group will increase by 944,000, and the latter will decrease by 287,000.
This is important as medical and long-term care expenses per capita increase with age. Under the current medical and long-term care insurance systems, the government's financial contributions per capita will rise sharply as the age of the beneficiaries rises. As shown in Figure 2, the government subsidy for medical and long-term care expenses per capita is JPY 93,000 (USD 845) for those aged between 65–74 and JPY 456,000 (USD 4,145) for those aged 75 and older. Therefore, the financial resources that the government must secure to maintain these current insurance systems will expand more than ever between now and 2030.
Figure 1 Forecast of population changes by age group
Source: Ministry of Finance.
Figure 2 Amount contributed by the government for medical and long-term care expenses per capita
Source: Ministry of Finance.