Changes in demographic structure, such as declines in the working-age population, call for a review of the sources of the labor force. Among Asian nations, Japan has the largest percentage of aging citizens, and according to JILPT (2019), the labor force in Japan is expected to decrease by 12.7 million in 2040, compared to 2017, if the economy remains at zero growth and labor force participation remains the same. Focusing on Japan, this paper examines four countermeasures to deal with the anticipated labor shortage in the future: 1) increasing employment of the elderly; 2) increasing employment of women; 3) actively utilizing the overseas labor force; and 4) improving productivity through promoting human resource development.
A thoughtful consideration of these measures reveals that securing and increasing Japan’s labor force will not be easy. The reason for this is that Japan is required to shift the resource of the labor force from men in their 20s to 50s to workers with diverse attributes and to provide workers with opportunities to develop themselves to increase their productivity. Two lessons can be learned from Japan. Firstly, there would be no short-term or quick-acting measures to secure the labor force. Secondly, even if it seems like a long way around, it is a realistic shortcut to accumulate small ingenuities and improvements for responding to the various needs of diverse workers with different attributes (e.g., gender, age, and country of origin). Population aging requires new paths for economic development, which includes thinking differently about the acquisition of a capable labor force.

In Taiwan, two characteristics of fertility in East Asia, ultra-low fertility and a rapid
decrease in fertility rates over a short period of time,can be found.In 2010,Taiwan’s total
fertility rate (TFR) fell sharply due to the unprecedented low level of 0.895 while both
characteristics,ultra-low fertility levels and a rapid decrease in fertility rates,are common
in the country’s prefectures and large-scale cities as well as throughout all of Taiwan.
McDonald (2009)argued that the ultra-low fertility trend in East Asia is fueled by the
socioeconomic profiles of institutions related to child-rearing because people of child
-rearing age tend to become economically risk-averse due to the competitive nature of
labor market deregulation.
This study,based on McDonald’s view of the economically risk-averse tendency among
young people of child-rearing age,aims to explore the effects of determinants on fertility,
including policy factors, by utilizing time series data on a regional level. This analysis
focuses on the period from 1990 to 2010 when Taiwan’s fertility decreased rapidly.
Among the supporting policies related to child-rearing,the results showed that the effect
of the rate of utilization of child-care centers was not significant while the ratio of public
child-care center enrollment to total child-care center enrollment was positive and significant.
The former indicates that young people of child-rearing age think their child’s
generation will also suffer from economic risks and, thus, they become keen on investing
in their child’s education.This factor results in an abundant supply of costly child education
programs and facilities,provided by private child-care centers that are sensitive to market
demand.Therefore,this could lead to a greater financial burden on household budgets.On
the other hand, the latter implies that child-care services that fully utilize the primary
characteristics of a public child-care center, namely providing a less costly and less
excessive response to the market mechanism, may be effective options for child-care
support.
To date, public child-care centers are not popular among Taiwanese citizens because
they do not meet the high educational expectations demanded by parents and they conjure
a negative image of a child-care center that only serves poor families who can’t afford the
costly expense of sending their children to private child-care centers.However,if sufficient
subsidies are allocated to parents or to private child-care centers, the parent’s financial
burden of paying for private child-care is expected to be reduced.Additionally,the image
of a public child-care center could be improved if parents had the option of choosing
another type of public child-care center that could strike a balance between offering sound
child-care functions and providing the expected educational functions.
Regarding the effect of leave systems, such as maternity leave or child-care leave, the
study results also showed positive and significant effects.This means that,especially from
the view point of females in the work force,the prevalence of the leave system is expected
to reduce the career risks associated with child-bearing and child-rearing ; namely, females with children will be able to continue working and develop their careers,even after giving birth.

The Japan Center for Economic Research (JCER) provides a visiting fellow program for young Asian researchers who take sabbatical leave. JCER aims at helping visiting fellows by providing them with a learning environment where they can interact with their peers. I conducted a survey of eight visiting fellows to determine their level of satisfaction with the program. The survey revealed a high degree of satisfaction in terms of daily support from peers and interactions with peers, and both resulted in the visiting fellows having a high level of satisfaction with the program and a continued interest in Japanese economy.

To compare management practices between Japanese and Korean firms, we conducted interview surveys
on organizational and human resource management based on Bloom and Van Reenen (2007). The average
management scores resulting from the interview surveys in Japanese firms were higher than in Korean
firms. The gap in the scores between Japan and Korea can be explained by more conservative human
resource management practices in Korean small and medium sized firms. We regressed some indicators
representing management practices on firm performance. Estimation results suggest that human resource
management affects firm performance in Korean firms. In Japanese firms, we expect that organizational
reform plays a role in improving firm performance in the service sector.

The demographic structure of Asia is expected to change rapidly from around 2020 up to around
2050. Following Japan, which is already at an advanced stage of aging and birthrate decline, China,
South Korea, Thailand, and Singapore will also witness a further decline in their birthrates and an
aging of their populations. Next in line will be the remaining countries of the Association of South-
East Asian Nations as well as India. Such changes, accompanied by a decline in the labor force, will
not only adversely affect economic growth, but also have a major impact on voting structures,
savings rates, and social security systems. Moreover, the process of demographic aging in Asia will
be faster than in Japan, and its extent will be substantial, both of which exacerbates the negative
effects. On positive side, these trends will give rise to the emergence of new markets

This book focuses on the high-income Asia that experienced fast economic growth and rapid demographic change in recent decades. High-income Asia includes Japan, South Korea, Taiwan, Singapore and Hong Kong, according to the World Bank’s category classification.
These countries enjoyed a brief period of brilliant economic growth but then faced a demographic shift, with the lowest fertility in the world.
First, this book gives an overview of the rapid economic growth and demographic changes in high-income Asia over the past several decades. Then, among the challenges following economic growth, it focuses on two points: 1) how to balance childbirth and childcare with women’s employment; and 2) how to respond to the anticipated labor shortage in the future. fastest-aging population in the world, with additional reference to parts of high-income Asia other than Japan, which also are aging.
Based on analyses of these major points, the author discusses the policy implications for developing countries learned from the tough lessons of high-income Asia.

Recent global financial crises triggered an economic downturn in many developed countries, such as the United States and several European countries, while the dynamic growth of Asian countries stood out. This brought about a new image of Asia as a potential growth center on a global scale, rather than an economic region lagging behind advanced economies. The Asia Development Bank (ADB) forecasts that the region will maintain a higher growth rate than that of advanced economies throughout 2014—an average of 6% compared to 1–2% of advanced economies.
Not only export expansion, but also a growing middle class in Asia has contributed to the area’s economic expansion, providing Asian countries with a window of opportunity to leap from low/middle income levels to high income levels, as measured by per capita GDP or GNI. It may sound easy for these countries to run up the ladder of economic growth, but the potential risks of quickly shifting from low/middle to high income levels are often overlooked. In other words, a country should be careful not to fall into stagnation by focusing only on its growth path. Careful studies in history reveal that the experience of moving up the ladder of economic growth has varied among countries: very few countries experienced constant growth, while most countries were forced to run a spiral course.
Therefore, it is not realistic for Asian countries to assume that they can continuously grow without difficulty. That is, unless adequate policies are adopted, it is possible, if not likely, that Asian countries will fall into a stage of stagnation—specifically, the so-called middle income trap of middle income countries, defined as having a GNI per capita (2012) of 1,036–12,615 US dollars (World Bank classification). The middle income trap has been a hot topic of discussion among international institutions such as the International Monetary Fund and ADB, as well as in academia, throughout the last few years.
The probability of falling into the trap highlights an important issue, which can be illustrated by the impacts of quantitative easing (QE) tapering, a policy implemented by the Federal Reserve Bank (FRB). The start of QE tapering by the FRB is expected to cause a huge financial flow out of emerging countries, including Asian countries, into the United States and other advanced economies. Hence, it is likely that this will expose structural weaknesses by the subsequent capital shortfall in Asian countries, at least in some specific countries, and will have a negative influence on their economies.
Coping with the negative impacts of QE tapering will require an improvement of economic fundamentals—namely, structural reform—which is also the case with the middle income trap. If Asian countries want to avoid such a trap, structural reform must address the structural problems they face by, for example, promotion of investment, human resource development, strengthening of infrastructure, and expansion of the social system, including social security. The QE tapering policy raises problems in the short run, while the middle income trap relates to primal challenges in the long run.
Thus, Asian countries exhibit vulnerability of structural problems in addition to potential growth dynamism. This does not mean that potential growth dynamism in Asia might be cancelled out by vulnerability, because, from a developmental viewpoint, potential growth dynamism and vulnerability under changing external circumstances are two sides of a coin. Transformation into a leading engine of the world economy requires Asian countries to develop potential ability and mitigate vulnerability.
Based on the views expressed above, this book explores (1) the current state of Asian economies and 2) the conditions or policy counter-measures that lead to higher income levels under changing external circumstances, illustrated by case studies on three to four Asian economies and their structural problems. It also aims to paint a comprehensive picture of necessary policies, which will encourage Asian countries to move up the ladder of growth.