TY - JOUR
T1 - Population aging, government policy and the postwar Japanese economy
AU - Otsu, Keisuke
AU - Shibayama, Katsuyuki
N1 - Funding Information:
The authors are thankful for the comments from the editor, two referees, and participants of the 2016 Annual CIGS End of Year Conference, 2017 Asian Meeting of the Econometric Society, 2018 Annual SNDE Symposium, 2018 Keio-Waseda Macro Workshop, and workshops at the University of Kent, Senshu University, Waseda University and Keio University. Otsu acknowledges the financial support by Keio Gijuku Academic Development Funds.
Funding Information:
? The authors are thankful for the comments from the editor, two referees, and participants of the 2016 Annual CIGS End of Year Conference, 2017 Asian Meeting of the Econometric Society, 2018 Annual SNDE Symposium, 2018 Keio-Waseda Macro Workshop, and workshops at the University of Kent, Senshu University, Waseda University and Keio University. Otsu acknowledges the financial support by Keio Gijuku Academic Development Funds.
Publisher Copyright:
© 2022 Elsevier Inc.
PY - 2022/6
Y1 - 2022/6
N2 - This paper analyzes the Postwar Japanese economy with a parsimonious neoclassical growth model that incorporates the demographic transition in Japan. We find that i) the increase in the aged population share can account for most of the decline in employment and reduced output by 8%, ii) workweek shortening policy led to a 20% reduction in output from its potential level by reducing hours worked over the 1988-1994 period, iii) the rise in labor tax led to an 11% reduction in output from its potential level by discouraging hours worked, iv) the shift in the composition of government spending may have caused a slowdown in productivity growth and hence a reduction in the potential output level itself.
AB - This paper analyzes the Postwar Japanese economy with a parsimonious neoclassical growth model that incorporates the demographic transition in Japan. We find that i) the increase in the aged population share can account for most of the decline in employment and reduced output by 8%, ii) workweek shortening policy led to a 20% reduction in output from its potential level by reducing hours worked over the 1988-1994 period, iii) the rise in labor tax led to an 11% reduction in output from its potential level by discouraging hours worked, iv) the shift in the composition of government spending may have caused a slowdown in productivity growth and hence a reduction in the potential output level itself.
KW - Neoclassical growth model
KW - Population aging
KW - Productivity growth
KW - Workweek shortening
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U2 - 10.1016/j.jjie.2022.101191
DO - 10.1016/j.jjie.2022.101191
M3 - Article
AN - SCOPUS:85123764707
SN - 0889-1583
VL - 64
JO - Journal of the Japanese and International Economies
JF - Journal of the Japanese and International Economies
M1 - 101191
ER -