NBER Working Papers by Takashi Oshio

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Working Papers

March 2014Option Value of Work, Health Status, and Retirement Decisions in Japan: Evidence from the Japanese Study on Aging and Retirement (JSTAR)
with Satoshi Shimizutani, Mayu Fujii: w20001
This study examined the factors that affect the retirement decisions of the middle-aged and elderly in Japan, focusing especially on their earnings, public pension benefits, and health status. Using two-year panel data from the JSTAR and applying the OV model proposed by Stock and Wise (1990a, 1990b), we found that the probability of retirement has a negative and significant correlation with the OV of work, and that correlation does not depend on the health status. Our counter-factual simulation based on the OV model showed that, if the probability of being enrolled in the disability program were zero, the average years of work when individuals are in their 50s and 60s would increase. However, it should be emphasized that, in Japan—where being enrolled in the disability program is unlikely...
May 2011Disability Pension Program and Labor Force Participation in Japan: A Historical Perspective
with Satoshi Shimizutani: w17052
This paper utilizes historical information to explore the relationship between labor force participation of middle aged and old people and the disability program in Japan. In particular, we explore the time series dimension to identify what has determined the trend in disability program participation over time and relate it with the labor supply. We find that mortality and health measures have been largely unrelated to the disability program participation rates. While major revisions to the disability program have slightly expanded the eligibility for DI programs, the program participation is still very low; thus, the effect on labor force participation is very limited in Japan, which is in contrast with some European countries that have high take up rates, inducing early retirement.
April 2004Social Security and Trust Fund Management
In this paper we investigate why and to what extent the government should have a social security trust fund, and how it should manage the fund in the face of demographic shocks, based on a simple overlapping-generations model. We show that, given an aging population, a trust fund in some form could achieve the (modified) golden rule or to offset the negative income effect of a PAYGO system. Besides, in a closed economy where factor-prices effects dominate, using the trust fund as a buffer for demographic shocks could lead to a widening of intergenerational inequality. We also the discuss policy implications of our analysis on the social security reform debate in Japan, including the fixed tax method and the use of the trust fund in the face of a rapidly aging population.
September 1997Social Security and Retirement in Japan
with Naohiro Yashiro: w6156
We provide the incentive mechanism of the public pension on the retirement decisions made in the Japanese labor market. Though the labor market participation of Japanese older persons is quite high by international standards, a principle incentive mechanism of the public pension system in Japan affecting the retirement behavior has many things in common with those in other OECD countries. The pension benefits are designed actuarially unfair,' and the decision to work beyond age 60 is penalized. As the population ages quite rapidly, it is wasteful to maintain the disincentive mechanism arising from the actuarially unfair pension scheme for older persons.

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