The so-called 2012 Problem seems not to have been a problem at all in Japan, where the labour participation rate for men aged 65 or older is 28.8%, the highest of all G7 countries. (According to the ILO, US is No.2 at 22.1% and Canada is No.3 at 16.2%)
The Nikkei published the graph, where the sky blue indicates labor participation rate and dark navy indicates those actually in the labour market.
Back in 2007, as the Boomers (those born between 1947 and 1949) began to reach retirement age, Japanese society on the whole geared up for a mass exodus of healthy, able-bodied seniors from the labour market. But many employers enabled seniors to remain employed (though, most on much less favourable terms) through to age 65, and as such, we expected the mass exodus to only be postponed till 2012.
Once we hit 2012, it turned out that the average monthly employment rate from January through November 2012 rose 0.8 percentage points from the previous year, to 37.0%; and the labour participation rate, which includes those who may not currently be in employment but have the desire to work, also increased 0.8 percentage points to 38.2%. Both figures were the highest since 1999.
In 2007, when those born in 1947 reached retirement age, the employment rate of those aged 60 through 64 increased 2.9 percentage points to 55.5%. The increase in 2012 was smaller than that in 2007, so it cannot just open-handedly be said that mass retirement did not happen, but still, there are an increasing number of economists, including Toshihiro Nagahama of Daiichi Life Research Institute Inc., according to the Nikkei, who are beginning to say that "the retirement of the Baby Boomers are happening at a much slower pace than aniticpated."
When temp services company, Human Resocia, headquartered in Shinjuku, Tokyo, launched a temp service especially for seniors, they received 500 to 600 applications from mostly those in their 60s. The most popular positions seems to be as "management advisors" drawing on experience and expertise.
Resocia's staff commented that most applicants do not have a sense of need of monies to make a living, but they apply more because people want to put their experience to use or have too much time on their hands. There is approximately one position to every nine applicants.
The unemployment rate of those aged 65 through 69 in November 2012 was 3.1%, lower than the overall average of 4.0%. Still, Norichukin Research Institute's Takeshi Minami Senior Research Director is quoted in the Nikkei as saying that "if one includes the number of able people who would work if they had the opportunity, the hidden unemployment rate is much higher."
The number of people aged 60 and above have increased 30% in 10 years, to an average of 12.35 million during January through November 2012, on average. Minami emphasizes the importance of having sufficient measures in place to employ seniors in that "keeping them in the workforce will soften the shrinkage of the labour force due to our shrinking population, and as it will also stimlate consumption by seniors, there will be a positive impact on the overall Japanese economy."
On the other hand, there is, of course, the potential trade off with the employment of youths and young adults. According to a survey by the Keidanren, when it became fundamentally mandatory to extend the retirement age of seniors to 65, more than 30% of responding businesses said that they would reduce the hiring of younger employees.
The Nikkei suggests that to counter this trend, passing on the knowhow of seniors to young adults and enhancing work skills training for free lance and part time workers are a necessary step.
### CarpediemJapan Comments and Observations ###
I had predicted in 2007 that there will be an increase in entrepreneurs aged 60 and above as a result of the Baby Boomers reaching retirement age, and as the self-employment rate in Japan (green in the graphs below) is on a steady decline, many economists (such as Kenichi Omae) and leading think tanks are calling for the need to provide avid support to enable this.
(In the graphs below, (1) is the Self-Employment Rate Trends; and (2) is the same excluding agriculture, forestry, and fisheries. Red is the UK, purple is Germanu, lime green is France, and navy blue is the US). The excerpt is from the Japanese Cabineｔ Office Report of July 2011.)
Research on entrepreneurs by the Japan Finance Corporation, released on 25 December 2012, indicates that 12.1% of the 782 respondents to its survey conducted in August last year, were aged 55 or above (their definition of "senior entrepreneurs") shows that 22.1% of them have launched businesses in the medical and welfare sectors while food & beverages and accommodation was ranked No.2 at 14.7%. Such entrepreneurs look to utilize their experience and their financial goals are predominantly to earn enough to support their livelihoods than to earn as much as possible, in line with what the Nikkei reports as learnings through Resocia, above.