An Econometric Analysis of Non-enrollment in the National Pension by Foreign Residents in Japan

In recent years, the rapid increase in the population of foreign residents in Japan has spurred more frequent discussions on social security issues concerning this group. Despite this, the non-enrollment rate in the national pension among foreign residents remains high, and the specific factors contributing to their non-enrollment remain unclear. This study conducted the first empirical analysis on the factors leading to the non-enrollment of foreign residents in Japan’s national pension using publicly available data. The results indicate that residence statuses restricted by work activities, liquidity constraints, years of education, and enrollment in private pensions in Japan or public pensions in other countries significantly influence the likelihood of foreign residents enrolling in Japan’s national pension. Additionally, the study suggests that whether a foreign resident’s country or region of nationality possesses a universal pension plan or an equivalent system is a potential factor affecting their enrollment in Japan’s national pension. This effect is particularly pronounced among foreign student populations.