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Economy

1 in 5 workers will be seniors in 2040, Japan predicts

Technology and work reforms needed to keep them in the workforce

The population of seniors 65 and up is expected to peak around 2040. (Photo by Kei Higuchi)

TOKYO -- Seniors 65 and older will account for nearly 20% of Japan's workforce in 2040 if labor participation rises on the back of robust economic growth, according to a labor ministry outlook released Tuesday.

The 65-and-up demographic is expected to peak around 2040. Even with economic growth, Japan's workforce that year would still fall nearly 10% short of 2017 levels. The 65-and-up group accounted for 12%, or about an eighth, of the total workforce in 2017.

If Japan traces a more grim path of near-zero economic growth that depresses labor participation by women and seniors, the workforce would shrink 20% from 2017 levels to 52.45 million in 2040. 

Under the growth scenario, workers in medical and nursing care would increase to 9.74 million, accounting for 16% of the overall workforce, up from 12% in 2017. But workers would decrease in agriculture, forestry and fisheries; mining and construction; and the wholesale and retail sectors.

If seniors come to occupy a larger portion of the workforce, nonregular workers are likely to increase because they tend to choose shorter hours. Part-timers doubled from 7% of the workforce in 1993 to 14% in 2017.

Of all nonregular workers in the July-September quarter, 2.61 million chose that arrangement to accommodate such other responsibilities as housekeeping, child care and eldercare, according to a Ministry of Internal Affairs and Communications survey. For the first time, they outnumbered those who could not find full-time positions.

Digital technologies, including artificial intelligence, and company policies accommodating flexible work arrangements would be key to increasing opportunities for seniors. The outlook report projects 0.8% annual productivity growth between 2017 and 2040 based on technological advances.

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