Social security in Japan - statistics & facts
Social security ensures a population’s access to health care and protects individuals and households against the risks of sickness, accidents, unemployment and old age. Social insurance in the form of health insurance, pension insurance, long-term care insurance, and labor insurance form the core of Japan’s social security system.
Social expenditure, according to the OECD definition, amounted to almost 143 trillion Japanese yen in the fiscal year 2021, equivalent to 24.9 percent of Japan’s GDP. Total social benefits, according to the ILO definition, amounted to 138.7 trillion yen, or 35 percent of the national income. Medical and pension insurance, the main pillars of Japan’s social security system, together accounted for over 74 percent of the expenses.
Growing concerns over the strained social protection system have prompted calls for reform to ensure its sustainability amid the demographic challenges. For the fiscal year 2025, the government plans reforms to the pension system. To counter the country's dramatic fertility decline, it also intends to increase spending on family policy in the coming years.
Social security in Japan
Japan’s welfare state started to evolve in 1874 with the introduction of poverty relief. In 1922, health insurance became the country’s first social insurance scheme. Since then, Japan has developed a comprehensive welfare system. Public pension and health insurance coverage became universal in 1961. In 2000, long-term care insurance was established, against the backdrop of a growing elderly population in need of care and the erosion of traditional family support for the elderly.Social expenditure, according to the OECD definition, amounted to almost 143 trillion Japanese yen in the fiscal year 2021, equivalent to 24.9 percent of Japan’s GDP. Total social benefits, according to the ILO definition, amounted to 138.7 trillion yen, or 35 percent of the national income. Medical and pension insurance, the main pillars of Japan’s social security system, together accounted for over 74 percent of the expenses.
Aging population and growing social spending
Over the past decades, Japan has seen a steady increase in social spending, primarily due to the rapid population aging. Social security expenditure accounts for around one-third of Japan’s total government expenditure and exceeds the income from taxes and social insurance premiums, causing fiscal deficits. Japan’s national burden rate, which puts social insurance contributions and total taxes in relation to the national income, has been on an upward trend but remained lower than in other major economies.Growing concerns over the strained social protection system have prompted calls for reform to ensure its sustainability amid the demographic challenges. For the fiscal year 2025, the government plans reforms to the pension system. To counter the country's dramatic fertility decline, it also intends to increase spending on family policy in the coming years.
