Raising the official retirement age may have little impact

Japan's adverse demographics and huge public debt are strengthening the pressure for labour market reforms that could both lift economic growth and save the government money. However, raising the official retirement age is unlikely to do much to boost the labour force, as many Japanese already work much longer than necessary to qualify for state pensions. Government spending on pensions would also fall only slightly. Encouraging more women to work could be more effective in raising potential growth. Unfortunately, the government's plans to provide additional childcare facilities alone are unlikely to do much to lift female participation.