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Japan performs well in many measures of well-being, and ranks close to the average or higher in several topics in the Better Life Index.
Money, while it cannot buy happiness, is an important means to achieving higher living standards. In Japan, the average household net-adjusted disposable income per capita is 25 066 USD a year, more than the OECD average of 23 938 USD a year. But there is a considerable gap between the richest and poorest – the top 20% of the population earn more than six times as much as the bottom 20%.
In terms of employment, 71% of people aged 15 to 64 in Japan have a paid job, above the OECD employment average of 65%. Some 80% of men are in paid work, compared with 61% of women, suggesting that women encounter difficulties in balancing work and family life. People in Japan work 1 745 hours a year, less than the OECD average of 1 765 hours.
Having a good education is an important requisite for finding a job. Japan is a top-performing country in terms of the quality of its educational system. The average student scored 540 in reading literacy, maths and science in the OECD’s Programme for International Student Assessment (PISA). This score is much higher than the OECD average of 497, making Japan one of the strongest OECD country in students’ skills. Although girls outperformed boys in many OECD countries, in Japan boys scored 2 points higher than girls on average. In terms of health, life expectancy at birth in Japan is almost 83 years, three years higher than the OECD average of 80 years. Life expectancy for women is 86 years, compared with 79 for men. The level of atmospheric PM10 – tiny air pollutant particles small enough to enter and cause damage to the lungs – is 24.1 micrograms per cubic meter, higher than the OECD average of 20.1 micrograms per cubic meter. Japan does better in terms of water quality, as 86% of people say they are satisfied with the quality of their water, compared with an OECD average of 84%.
Concerning the public sphere, there is a strong sense of community and moderate levels of civic participation in Japan, where 90% of people believe that they know someone they could rely on in time of need, slightly higher than the OECD average of 89%. Voter turnout, a measure of public trust in government and of citizens’ participation in the political process, was 59% during recent elections; below the OECD average of 72%. There is no difference in voting levels across society; voter turnout is the same for the top 20% of the population and the bottom 20%, suggesting there is broad social inclusion in Japan’s democratic institutions.
In general; the Japanese are more satisfied with their lives than the OECD average, with 86% of people saying they have more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc.) than negative ones (pain, worry, sadness, boredom, etc.). This figure is higher than the OECD average of 76%.
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Japan: Advancing the Third Arrow for a Resilient Economy and Inclusive Growth
This book provides an overview of the key challenges faced by Japan and OECD's main policy recommendations to address them. Drawing on the OECD’s expertise in comparing country experiences and identifying best practices, the book tailors the OECD’s policy advice to the specific and timely priorities of Japan, focusing on how its government can make reform happen.Read this report
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Japan in Detail
Housing – Japan expand
Living in satisfactory housing conditions is one of the most important aspects of people’s lives. Housing is essential to meet basic needs, such as shelter, but it is not just a question of four walls and a roof. Housing should offer a place to sleep and rest where people feel safe and have privacy and personal space; somewhere they can raise a family. All of these elements help make a house a home. And of course there is the question whether people can afford adequate housing.
Housing costs take up a large share of the household budget and represent the largest single expenditure for many individuals and families, by the time you add up elements such as rent, gas, electricity, water, furniture or repairs. In Japan, households on average spend 22% of their gross adjusted disposable income on keeping a roof over their heads, slightly above the OECD average of 21%.
In addition to housing costs it is also important to examine living conditions, such as the average number of rooms shared per person and whether households have access to basic facilities. In Japan, 77% of people say they are satisfied with their current housing situation, less than the OECD average of 87%. This low level of subjective satisfaction reflects Japan’s mixed performance in objective housing indicators.
The number of rooms in a dwelling, divided by the number of persons living there, indicates whether residents are living in crowded conditions. Overcrowded housing may have a negative impact on physical and mental health, relations with others and children´s development. In addition, dense living conditions are often a sign of inadequate water and sewage supply. In Japan, the average home contains 1.8 rooms per person, more than the OECD average of 1.6 rooms per person. In terms of basic facilities, 93.6% of people in Japan live in dwellings with private access to an indoor flushing toilet, less than the OECD average of 97.9%.
More ResourcesHow's Life? at a Glance
Income – Japan expand
While money may not buy happiness, it is an important means to achieving higher living standards and thus greater well-being. Higher economic wealth may also improve access to quality education, health care and housing.
Household net-adjusted disposable income is the amount of money that a household earns each year after taxes and transfers. It represents the money available to a household for spending on goods or services. In Japan, the average household net-adjusted disposable income per capita is 25 066 USD a year, higher than the OECD average of 23 938 USD.
Household financial wealth is the total value of a household’s financial worth. In Japan, the average household net financial wealth per capita is estimated at 85 309 USD, much higher than the OECD average of 42 903 USD. While the ideal measure of household wealth should include non-financial assets (e.g. land and dwellings), such information is currently available for only a small number of OECD countries.
Despite a general increase in living standards across OECD countries over the past fifteen years, not all people have benefited from this to the same extent. In Japan, the average net adjusted disposable income of the top 20% of the population is an estimated 50 150 USD a year, whereas the bottom 20% live on an estimated 8 105 USD a year.
More ResourcesHow's Life? at a Glance
Jobs – Japan expand
Having a job brings many important benefits, including: providing a source of income, improving social inclusion, fulfilling one’s own aspirations, building self-esteem and developing skills and competencies. In Japan, more than 71% of the working-age population aged 15 to 64 has a paid job. This figure is higher than the OECD employment average of 65%. Employment rates are generally higher for individuals with a higher level of education; in Japan an estimated 81% of individuals with at least a tertiary education have a paid job, compared with an estimated 69% for those without an upper secondary education. This 12 percentage point difference is much lower than the OECD average of 33 percentage points and suggests the job market in Japan is relatively inclusive.
Women are still less likely than men to participate in the labour market. In Japan, 61% of women have jobs. This is more than the OECD average of 57% but much less than the 80% employment rate of men in Japan. This 19 percentage point gender difference is higher than the OECD average of 16 percentage points and suggests employment opportunities for women could be improved.
Young people aged 15-24 in Japan face an unemployment rate of 7.9% compared with the OECD average of 16.3%.
Unemployed persons are defined as those who are not currently working but are willing to do so and actively searching for work. Long-term unemployment can have a large negative effect on feelings of well-being and self-worth and result in a loss of skills, further reducing employability. In Japan, the percentage of the labour force that has been unemployed for a year or longer is currently at nearly 1.7%, lower than the OECD average of 2.7%. There is little difference on average between men and women in the OECD area when it comes to long-term unemployment. In Japan, however, the difference is relatively high with an unemployment rate of 2.1% for men and 1.1% for women.
The wages and other monetary benefits that come with employment are an important aspect of job quality. In Japan, people earn 36 039 US dollars per year on average, less than the OECD average of 41 010 USD. Not everyone earns that amount however. Whereas the top 20% of the population earn an estimated 46 311 USD per year, the bottom 20% live on an estimated 22 718 USD per year.
Another essential factor of employment quality is job security. Workers facing a high risk of job loss are more vulnerable, especially in countries with smaller social safety nets. In Japan, workers face a 2.9% chance of losing their job, lower than the OECD average of 5.3%.
More ResourcesWell‑being in the workplace: Measuring job quality
Community – Japan expand
Humans are social creatures. The frequency of our contact with others and the quality of our personal relationships are thus crucial determinants of our well-being. Helping others can also make you happier. People who volunteer tend to be more satisfied with their lives than those who do not. Time spent volunteering also contributes to a healthy civil society. On average, people in Japan spend 4 minutes per day in volunteering activities, in line with the OECD average. Around 25% reported having helped a stranger in the last month, the lowest rate in the OECD where the average is 49%.
A strong social network, or community, can provide emotional support during both good and bad times as well as provide access to jobs, services and other material opportunities. In Japan, 90% of people believe that they know someone they could rely on in a time of need, slightly more than the OECD average of 89%. There is no difference between men and women. While gender has no impact on social network support, there is a clear relationship between the availability of social support on the one hand, and people’s, education level on the other. In Japan, 86% of people who have completed primary education report having someone to count on for help in times of need, compared to 93% for people who attained tertiary education.
A weak social network can result in limited economic opportunities, a lack of contact with others, and eventually, feelings of isolation. Socially isolated individuals face difficulties integrating into society as a contributing member and fulfilling personal aspirations.
More ResourcesHow's Life? at a Glance OECD Insights: Human Capital
Education – Japan expand
A well-educated and well-trained population is essential for a country’s social and economic well-being. Education plays a key role in providing individuals with the knowledge, skills and competences needed to participate effectively in society and in the economy. Having a good education greatly improves the likelihood of finding a job and earning enough money. Across OECD countries, 83% of people with university-level degrees have a job, compared with 55% for those with only a secondary school diploma. Lifetime earnings also increase with each level of education.
The Japanese can expect to go through 16.2 years of education between the ages of 5 and 39, less than the OECD average of 17.7 years. This level of education expectancy could influence Japan’s future performance in the educational attainment of its 25-34 year-old population.
The OECD’s Programme for International Student Assessment (PISA) reviews the extent to which students have acquired some of the knowledge and skills that are essential for full participation in modern societies. In 2012, PISA focused on examining students’ reading ability, skills in maths and level in sciences, as research shows that these skills are more reliable predictors of economic and social well-being than the number of years spent in school.
Japan is one of the top-performing OECD countries in reading literacy, maths and sciences with the average student scoring 540. This score is higher than the OECD average of 497, making Japan one of the strongest OECD countries in students’ skills. On average in Japan, boys outperformed girls by 2 points. The best-performing school systems manage to provide high-quality education to all students. In Japan, the average difference in results, between the students with the highest socio-economic background and the students with the lowest socio-economic background, is 76 points, lower than the OECD average of 96 points. This suggests the school system in Japan provides relatively equal access to high-quality education.
Better Policies for Better Lives
Japan has been at or near the top of the international rankings on education. Its success can be attributed to a first rate teaching force, superb family support for students at home, the way resources are focused on instruction and the strong incentives for students to take tough courses and study hard in school. The Japanese education system is also grounded in a deep commitment to children that is both concrete and enduring.
A strong focus on equity
Japanese classes are heterogeneous and large (more than 35 students on average) and no student is held back or promoted on account of ability. Furthermore, all are expected to master the same demanding curriculum. This is a powerful formula for equity in terms of outcomes. What is particularly impressive about this approach is that the expected outcomes are not set at the lowest common denominator, but at the top of the range of possible outcomes worldwide.
There is a widely-shared belief in Japan that these policies achieve the greatest good for the greatest number and the results bear this out. The system is set up so that high-achieving students can help lower-achieving students within a group, within a classroom and within a school. The research literature shows that all students are helped by this approach, because the students who teach and tutor learn as much or nearly as much in the process of tutoring as the recipient of the tutoring. This approach is consistent with Japanese values and contributes greatly to the generally high level of Japanese achievement.
Additionally, Japanese teachers and principals are often reassigned to different schools by the prefectures. This is done, among other reasons, to make sure that the distribution of the most capable teachers among schools is fair and equitable.
More ResourcesHow's Life? at a Glance
Environment – Japan expand
The quality of our local living environment has a direct impact on our health and well-being. Outdoor air pollution is one important environmental issue that directly affects the quality of peoples’ lives. Despite national and international interventions and decreases in major pollutant emissions, the health impacts of urban air pollution continue to worsen, with air pollution set to become the top environmental cause of premature mortality globally by 2050. Air pollution in urban centres, often caused by transport and the use of small-scale burning of wood or coal, is linked to a range of health problems, from minor eye irritation to upper respiratory symptoms in the short-term and chronic respiratory diseases such as asthma, cardiovascular diseases and lung cancer in the long-term. Children and the elderly may be particularly vulnerable.
PM10 – tiny particulate matter small enough to be inhaled into the deepest part of the lung – is monitored in OECD countries because it can harm human health and reduce life expectancy. In Japan, PM10 levels are 24.1 micrograms per cubic meter, higher than the OECD average of 20.1 micrograms per cubic meter and higher than the annual guideline limit of 20 micrograms per cubic meter set by the World Health Organization.
Access to clean water is fundamental to human well-being. Despite significant progress in OECD countries in reducing water pollution, improvements in freshwater quality are not always easy to discern. In Japan, 86% of people say they are satisfied with water quality, slightly higher than the OECD average of 84%.
Better Policies for Better Lives
When green means jobs
Japan’s first Eco Town in the city of Kitakyushu has grown and created more than 1 400 jobs around recycling and waste to energy activities. Recycling activities range from plastic bottles, automobiles and electronic home appliances, to mixed construction waste, fluorescent tubes and office equipment. As of March 2012, total investments (private and public) in the Eco-Town since its creation in 1991 amounted to JPY 66.8 billion.
The basic concept of Eco-Town is now being expanded to the whole City of Kitakyushu. Certain aspects of the Eco-Town offer an opportunity for expansion to a larger scale, including its physical size (i.e. considering the whole city as an Eco-Industrial complex), recycling local industrial waste and reuse of industry by-products such as heat for residential and commercial use.
More ResourcesHow's Life? at a Glance OECD Environmental Outlook to 2030
Governance – Japan expand
Trust in government is essential for social cohesion and well-being. In Japan, 17% of people say they trust their national government, much less than the OECD average of 39%. High voter turnout is another measure of public trust in government and of citizens’ participation in the political process. In the most recent elections for which data is available, voter turnout in Japan was 59% of those registered. This figure is lower than the OECD average of 72%.
Even if the right to vote is universal in all OECD countries, not everyone exercises this right. There is little difference in the voting rates of men and women in most OECD countries. This is the case in Japan, where the voter turnout of men and women is similar, at an estimated 60% and 59%. While on average there are few differences between men and women concerning participation in elections, income can have a strong influence on voter turnout. In Japan, however voter turnout for the top 20% of the population and the bottom 20% is the same. This suggests there is broad social inclusion in Japan’s democratic institutions.
Ensuring that government decision making is not compromised by conflicts of interest is key to maintaining trust in government. Transparency is therefore essential to hold government to account and to maintain confidence in public institutions.
Freedom of information laws (FOI) allow the possibility for individuals to access undisclosed information. For such policies to be successful, the public should have a clear understanding of their rights under the law, should be able to file requests with ease and should be protected against any possible retaliation. People in Japan can only file a request for information in writing – not yet online, in person or by telephone. In addition, there are no provisions for anonymity or protection from retaliation.
More ResourcesHow's Life? at a Glance
Health – Japan expand
Most OECD countries have enjoyed large gains in life expectancy over the past decades, thanks to improvements in living conditions, public health interventions and progress in medical care. Japan enjoys one of the highest life expectancies among OECD countries at almost 83 years, three years above the OECD average of 80 years. Life expectancy for women is 86 years, compared with 79 for men, a slightly wider difference than the average OECD gender gap of six years with a life expectancy of 83 years for women and 77 for men. The remarkable gains in longevity in Japan have been largely driven by falling death rates from diseases of the circulatory system, which are the lowest now of all OECD countries, for both males and females.
Higher life expectancy is generally associated with higher healthcare spending per person, although many other factors have an impact on life expectancy (such as living standards, lifestyles, education and environmental factors). Total health spending accounts for 9.6% of GDP in Japan, slightly above the OECD average of 9.4%. Japan ranks below the OECD average in terms of total health spending per person, at 3 213 USD in 2010, compared with an OECD average of 3 322 USD. Between 2000 and 2009, total health spending in Japan increased in real terms by 3.1% per year on average a slower growth rate than the OECD average of 4.0%.
Throughout the OECD, tobacco consumption and excessive weight gain remain two important risk factors for many chronic diseases. In Japan, 20.1% of adults report smoking every day, compared with an OECD average of 20.9%. In many OECD countries, large proportions of the population are overweight or obese. However, at just 4.1% of the general population, Japan has the lowest rate of obesity in the OECD, where the average is 17.2%.
When asked, “How is your health in general?” only 30% of people in Japan reported to be in good health, much lower than the OECD average of 69%, and the lowest score across the OECD. Caution is required in making cross-country comparisons as the assessment can be affected by factors as cultural background. Despite the subjective nature of this question, answers have been found to be a good predictor of people’s future health care use. Gender, age and social status may affect answers to this question. On average in OECD countries, men are more likely to report good health than women, with an average of 72% for men and 67% for women. In Japan, the average is of 32% for men and 29% for women. Not surprisingly, older people report poorer health, as do those who are unemployed, or who have less education or income. About 35% of adults with a disposable income in the top 20% in Japan rated their health as ‘good’ or ‘very good’, compared to about 24% for those with a disposable income in the bottom 20%.
More ResourcesHow's Life? at a Glance
Life Satisfaction – Japan expand
Happiness or subjective well-being can be measured in terms of life satisfaction, the presence of positive experiences and feelings, and the absence of negative experiences and feelings. Such measures, while subjective, are a useful complement to objective data to compare the quality of life across countries.
Life satisfaction measures how people evaluate their life as a whole rather than their current feelings. It captures a reflective assessment of which life circumstances and conditions are important for subjective well-being. When asked to rate their general satisfaction with life on a scale from 0 to 10, the Japanese gave it a 6.0 grade, lower than the OECD average of 6.6.
There is little difference in life satisfaction levels between men and women across OECD countries. In Japan, however, women reported being somewhat happier than men, rating their lives at 6.2, compared with 5.8 for men. Education levels also influence subjective well-being. Whereas people who have only completed primary education in Japan have a life satisfaction level of 5.6, this score reaches 6.5 for people with tertiary education.
Happiness, or subjective well-being, is also measured by the presence of positive experiences and feelings, and/or the absence of negative experiences and feelings. In Japan 86% of people reported having more positive experiences in an average day (feelings of rest, pride in accomplishment, enjoyment, etc.) than negative ones (pain, worry, sadness, boredom, etc.). This figure is much higher than the OECD average of 76% and makes Japan the happiest country in the OECD. The apparent discrepancy between this figure and Japan’s life satisfaction rating might reflect cultural differences in reporting on life satisfaction.
More ResourcesHow's Life? at a Glance
Safety – Japan expand
Personal security is a core element for the well-being of individuals, and largely reflects the risks of people being physically assaulted or falling victim to other types of crime. Across the OECD, assault rates have generally declined in the past five years. In Japan, almost 1.4% of people reported falling victim to assault over the previous 12 months, much less than the OECD average of 3.9% and one of the lowest rates across the OECD. There is little difference between men and women in assault rates, at respectively 1.2% and 1.5%.
The homicide rate (the number of murders per 100,000 inhabitants) is a more reliable measure of a country’s safety level because, unlike other crimes, murders are usually always reported to the police. According to the latest OECD data, Japan’s homicide rate is 0.3, the lowest rate in the OECD, where the average homicide rate is 4.1. In Japan, the homicide rate is nearly the same for men and for women.
Fear of crime is another important indicator as it can constrain behaviour, restrict freedom and threaten the foundation of communities. Despite a general reduction in assault rates in the past five years, in many OECD countries feelings of security have declined. In Japan, 77% of people feel safe walking alone at night, higher than the OECD average of 69%. While men are at a greater risk of being victims of assaults and violent crimes, women report lower feelings of security than men. This has been explained by a greater fear of sexual attacks, the feeling they must also protect their children and their concern that they may be seen as partially responsible.
More ResourcesHow's Life? at a Glance
Work-Life Balance – Japan expand
Finding a suitable balance between work and life is a challenge for all workers, especially working parents. Some couples would like to have (more) children, but do not see how they could afford to stop working. Other parents are happy with the number of children in their family, but would like to work more. This is a challenge to governments because if parents cannot achieve their desired work/life balance, not only is their welfare lowered but so is development in the country.
People spend one-tenth to one-fifth of their time on unpaid work. The distribution of tasks within the family is still influenced by gender roles: men are more likely to spend more hours in paid work, while women spend longer in unpaid domestic work. Men in Japan, spend 62 minutes per day cooking, cleaning or caring, one of the lowest in the OECD where the average is 141 minutes. Japanese women spend more than four times longer per day than Japanese men on domestic work, with 299 minutes per day on average.
Another important aspect of work-life balance is the amount of time a person spends at work. Evidence suggests that long work hours may impair personal health, jeopardize safety and increase stress. People in Japan work 1 745 hours a year, close to the OECD average of 1 765 hours.
The more people work, the less time they have to spend on other activities, such as time with others or leisure. The amount and quality of leisure time is important for people’s overall well-being, and can bring additional physical and mental health benefits. In Japan,full-time workers devote 62% of their day on average, or nearly 14.9 hours, to personal care (eating, sleeping, etc.) and leisure (socialising with friends and family, hobbies, games, computer and television use, etc.) – slightly less than the OECD average of 15 hours. Fewer hours in paid work for women do not necessarily result in greater leisure time. In Japan, both men and women devote approximately 15 hours per day to personal care and leisure.
Better Policies for Better Lives
Japan has fewer babies and lower female employment
Parents in Japan find it difficult to combine work and family commitments. Workplace practices, private costs (housing and juku), and social norms put pressure on young people. Hence, young Japanese postpone marriage, delay parenthood and often have fewer children than intended.
In 2011, only 6 countries in the OECD had fewer babies per woman than Japan. With a fertility rate of 1.39, compared to 1.7 on average in the OECD, Japan was among the “lowest-low” fertility countries. There has been a small rebound since 2005, but nevertheless the population has started to decline.
Japanese social policy has introduced several measures to reduce barriers to both parenting and employment. However, despite these efforts, policies such as childcare can be further developed. Increasing childcare provision and reducing private costs of out-of-school services are both crucial for parental employment. Japanese public spending on childcare and preschool services is the fourth lowest among OECD countries. Childcare constraints persist and enrolment rates for children under-3 (at 26%), although increasing, are still below the OECD average (33%).
Japanese workplace practices make it difficult for parents to combine work and family life. After the high cost of education, many educated Japanese women first want to establish regular employment before having children. Furthermore, once Japanese women leave the labour force to care for children, they often end up in non-regular employment, which is often low paid, part-time, and temporary. Parents who wish to get back to work need to have better opportunities to re-enter regular employment, otherwise, those who can afford to stay at home do so rather than return to a low-quality job. The result is fewer babies and lower female employment levels than the OECD average, at a time when Japan needs more working women to replace the aging working age population.