Impact of population aging on youth wages in Japan: Evidence from Japanese panel data

Csiszár, Csenge (2026) Impact of population aging on youth wages in Japan: Evidence from Japanese panel data. In: Changing World, Changing Economy. Budapesti Gazdaságtudományi Egyetem, Budapest, pp. 57-72. ISBN 9786156886262

Preview

Text KUTATOINAP2025-Fulleditionrevised_6cikk.pdf - Published Version Download (750kB) | Preview

Abstract

Japan is now a super-aged society, with a large share of the population aged 65 or older. In this situation, the traditional labour structure, where wages are linked to age and tenure under lifetime employment, still plays a strong role. Many companies continue supporting elderly workers assuming their experience brings productivity, and government policies encouraging work beyond retirement age help maintain this system. While official data do not report negative effects of elderly employment on youth wages, international research suggests that delayed retirement can reduce opportunities for younger people. This study explores whether a similar dynamic is occurring in Japan by using grouped panel data covering employment by age group. An Overall Wage Score was developed to track wage distribution trends across cohorts, and a Bayesian multilevel model was applied to estimate the effects of changes in high-income groups. The model was estimated using the Japanese Panel Study of Employment Dynamics (JPSED). Results suggest that older age groups are gaining wage share while younger groups are losing ground, especially in lower brackets. The model indicates a negative relationship between growth in high-income cohorts and the wage score for others, which supports the idea that structural changes may put younger workers at a disadvantage. Due to the use of grouped data, important variables like occupation or hours worked could not be included, which limits interpretation. Future studies using individual-level data could provide deeper insight into wage inequality in Japan’s aging workforce.

Actions (login required)

Edit Item