Poverty in Japan

This chapter analyzes how the poverty rate has changed since 1985 due to demographic changes, long-term economic stagnation, and how tax and social security transfers have affected the poverty rate. The results can be summarized as follows. Looking at the poverty rate by age group in Japan, the poverty rate of the working-age population has been on an upward trend since 1985 due to long-term economic stagnation, in particular after the Asian currency crisis in 1997 and the financial crisis in 2009, and an increase in the number of non-regular workers. In contrast, poverty rate among the elderly has been improving relatively. The reason for the different trends in the poverty rate between the working-age and elderly is the difference in the effects of redistributive policies through tax and social security benefits. Since social security for the working-age population is not generous for non- regular workers, it is clear that social policies have not been able to suppress the increase in the poverty rate caused by economic factors. Looking at the poverty rate after redistribution, it appears that Japan's public pensions have greatly reduced the poverty rate among the elderly.