Substitutes for Immigrants?

Abstract

The rapid aging of Japan’s population and workforce has prompted proposals by key political and economic actors to advocate for immigration, though public sentiment has generally been opposed to immigration. Japan has therefore undertaken social policies to mobilize seniors and women as workers and establish gender equality in employment. These measures have sought to reduce the rising costs faced by Japan’s pension system and mitigate the long-term decline of the country’s fertility rate. The author examines the efficacy of these social policies in the context of Japan’s deregulation of labor markets and the expansion of flexible and low-wage employment arrangements. Although the proportion of nonregular employment has grown since the late 1980s, it has not created gains in productivity, though it has increased economic disparities. These outcomes suggest that the importation of unskilled immigrants as a (similarly) cheap source of labor would not be an adequate solution.