Glycative Stress Research
Online edition : ISSN 2188-3610
Print edition : ISSN 2188-3602
Received : February 1, 2022
Accepted : February 15, 2022
Published online : March 31, 2022
doi:10.24659/gsr.9.1_24

Original Paper

Economic consequences of anti-aging
Masahiko Takeda
Australian National University, Acton, Australia

Abstract

Usefulness of anti-aging medicine cannot be judged solely by its contribution to our healthy life expectancy. It is of limited
use if we cannot live our longer healthy life happily and comfortably, and for this, we need a social and economic environmentthat is suitable for longer-living individuals. This idea was implied by Yonei (2021), when he argued that we should build a“healthy society”. Anti-aging medicine’s success will accelerate the increase of “old-age dependency ratio”, which is alreadyvery high in Japan. An aging population poses a number of serious economic and economic-policy challenges, and unless we
handle them well, we will not be able to build a “healthy society”. We therefore review the state of population aging in Japan,
examine how the elderly live their lives now and in the future, and discuss economic policy issues that need to be addressed tohelp the Japanese economy adjust to aging.
One of the most salient issues in this regard is how to re-design social welfare programs, since there will be an increasing
number of the elderly poor in the future. Yonei (2021) makes an interesting proposal, which he calls “rice-sic income”, thatcombines the provision of “basic income” for the poor with a policy for revitalizing agriculture in Japan. We evaluate this
proposal from the point of view of standard economics.

KEY WORDS: population aging, old- age dependency ratio, public pension, labor participation,
    social welfare, basic income

Introduction

Anti-aging medicine primarily deals with how toextend our healthy life expectancy. However, Yonei Y(2021) 1) argues that in order to achieve the goal of antiaging, it is necessary that not only our physical and mental
health is elongated, but also that we are kept “socially andeconomically healthy ”. And he argues that we should aim
at building a “healthy society” consisting of physically andmentally healthy individuals.
As researcher specializing in economics and economic
policy, I fully agree with Yonei’s argument. In view of
the already high and rising share of the elderly in Japan’s
population 2), how this trend of aging affects Japan sociallyand economically is a very important and challenging
question. Anti-aging medicine contributes to this trend,
so unless Japan can skillfully handle various social andeconomic problems that may arise from population aging,
there is no guarantee that anti-aging medicine’s success inextending our life will lead to our increased happiness andsense of fulfillment. Without the latter, anti-aging medicine’s
usefulness may even become questionable.
In light of this, we review economic challenges being

posed by population aging in Japan, and discuss what isneeded to overcome these challenges. After that, from theviewpoint of economics, we examine the specific policy
measure Yonei 1) proposes as a way to build a “healthysociety ” --- what he calls “ rice-sic income” ※ 1 --- a versionof universal basic income that combines revitalization ofJapan’s agriculture and public support for the poor.
※ 1 The Japanese word for “rice” can be pronounced “beh-i”. Hence,“rice -sic income”, if the “rice” is replaced by the Japanese word for it,
has the same pronunciation as “basic income”.

The Prospects for Population
Aging in Japan
Anti-aging medicine is not just about the elderly.
For example, if those in their forties and fifties are able
to maintain the health and vitality of their twenties, it isunquestionably an anti-aging achievement. However, if suchachievements add up to longer healthy life expectancy, theContact Address: Masahiko Takeda, Honorary Professor
Australian National University
30 -11-201 Kitaminecho, Otaku, Tokyo, Japan
TEL : + 81-80-6847-2468 e-mail: mtakeda@toukastress.jp

Glycative Stress Research 2022; 9 (1) : 24 -32(c) Society for Glycative Stress Research_ 24 _Glycative Stress Research

general life expectancy will become longer as well andpopulation aging will accelerate.
The so-called “old- age dependency ratio” is given
by dividing the population above 65 by the working age
population between 15 and 65. This ratio was around 10 % inJapan in the 1960s but reached 48 % in 2020 ( Fig. 1 ) 3). The
ratio’s world average is 14 %, that of advanced economies
where aging is relatively advanced is 29 %, and next to Japan
are Finland and Italy with 37 %. Therefore, Japan’s ratiois the highest in the world by a wide margin 3). According
to the National Institute of Population and Social Security
Research’s quintennial population projection (the latest
published in 2017) 4), the ratio will continue to rise, reachingclose to 75% by 2050 ( Fig. 2 ).
In Fig. 2, the birth and mortality rates are assumed to be“medium”. Under the “medium” mortality rate assumption,
the life expectancy that was 80.75 years for male and 86.98
years for female in 2015 is assumed to be 83.27 and 89.63
in 2040, and 84.95 and 91.35 in 2065, respectively 4). The
National Institute also produces projections under “ high”
and “low” birth and mortality rates. If the mortality rateis assumed to be “low”, under which the life expectancy is
84.15 for male and 90.54 for female in 2040 and 86.05 and92.48 in 2065, respectively, the old-age dependency ratio
will be higher by about 2 percentage points in 2040, and by
about 3 percentage points in 2065. This increase is due toa roughly one-year increase in the life expectancy by 2065
relative to the “medium” mortality rate baseline. If the life
expectancy rises further thanks to anti-aging medicine, theratio’s increase will be larger.

50
40
30
20
10
0

1960
1962
1964
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020

Old-age dependency ratio (%)

60

Fig. 1. Old age dependency ratio (%) from 1960 to 2020.
The figure quoted from World Bank Data (Ref. 3).

75
70
65
60
55
50

Fig. 2. Projected old-age dependency ratio (%).

2065

2061

2063

2059

2057

2055

2051

2053

2047

2049

2045

20 41

2043

2039

2037

2035

2033

2031

2029

2027

2025

2023

2021

2019

40

2017

45

2015

Projected old-age dependency ratio (%)

80

Projected old-age dependency ratios are prepared by the author based on the midpoint assumptions of births
and deaths from the report of National Institute of Population and Social Security Research (Ref. 4).

_ 25 _

Economic Consequences of Anti-Aging

How do the elderly support themselves
economically?

households’ average annual income. 6 4 % of their income
come from “public pension”, 23% from “earned income” ※4,
and 7 % from “returns on assets”. Hence, the elderly earn
30 % of their income on their own, but their dependence on
pension is significant.
3) The elderly households that depend 100 % on public
pension as their income source are 48 %, and those that
depend more than 80 % on it are 13 %, of the total. The factthat the elderly earn 30 % of their income is true only on
average, and a majority of elderly households earn no income
or less than 20 % of their income from work or assets.
4) The elderly households’ average savings are 12.8
million yen, and their borrowing is 1.2 million yen. To asurvey question regarding changes in savings, 43% of theelderly responded that they declined. The reasons cited were
mostly household expenses of one type or another.

The word “dependency” in the old-age dependency ratio
implies that those above 65 years of age are dependent on theworking age population. If the elderly are indeed dependentand the dependency ratio is to rise above 70 %, the valueadded produced by the working age population needs to bedramatically higher, so that there are enough resources tobe transferred to the elderly ※ 2. However, the value-added
per hour worked has only been rising very slowly over the
past decades in Japan, and its dramatic acceleration is notexpected in the future.
Still, it is not the case that the elderly in Japan live
dependent on younger generations. To see this, we refer tothe Ministry of Health, Labor and Welfare’s “Comprehensive
Survey of Living Conditions” 5). This annual survey isconducted on a larger scale every three years, and the latest
large-scale survey that we cite here was in 2019. Therefore,
COVID -19’s impact is not yet felt in the survey.
According to this survey, the economic life of the elderly
has the following characteristics:

As can be seen from 3) above, average numbers can mask
important details. The same is true with the elderly’s savingsin 4). Since the Ministry’s report on the results of the survey
does not include any information about the distributionof savings among households, we supplement this aspectreferring to the “Public Opinion Survey on Household
Financial Assets and Liabilities” conducted in 2020 by
the Central Council for Financial Services Information 6).
According to this survey, the elderly households’ financial
asset holdings are as shown in Table 1 below.
Some elderly households hold a very large amount offinancial assets, which raises the mean and drives a sizablewedge between the mean and the median. The median

1) An increasing number of the elderly (65 or above) live
apart from their children and grandchildren (Fig. 3 ). As aresult, more of the elderly are probably paying their living
expenses such as food, housing, and utility out of their own
pockets.
2) The average annual income of elderly households ※ 3
is 3.1 million yen, which is less than half of the otherSinglepersonhouseholds

Marriedcouplehouseholds

1986

13.1

18.2

1989

14.8

1992

15.7

1995

17.3

1998

18.4

2001

19.4

2004

20.9

2007

22.5

2010

24.2

2013

25.6

2016

27.1

31.1

20.7

11.0

10.0

2017

26.4

32.5

19.9

11.0

10.2

2018

27.4

32.3

20.5

10.0

9.8

2019

28.8

20.0

9.4

9.5

0

Households with theelderly andunmarried young
11.1

12.1

12.8

33.3

29.8

18.5

31.1

40

Fig. 3. Structure of the elderly households.

50

60

11.7

16.2

19.8

32.3

11.4

18.3

17.7

29.9

11.6

21.9

16.4

29.4

11.6

25.5

15.7

27.8

12.2

29.7

13.7

26.7

11.9

36.6

12.9

24.2

30

12.7

40.7

11.7

22.8

20

Other
households

44.8

20.9

10

Threegeneration
households

11.2

13.2

70

80

10.4

90

100%

Values for 1995 exclude data for Hyogo Prefecture. Values for 2016 exclude data for Kumamoto Prefecture. “Households with the elderly
and unmarried young” includes “households of a married couple and unmarried children” and “households of a single parent and unmarried
children”. The figure quoted from 2019 Comprehensive Survey of Living Conditions, Figure 2, by Ministry of Health, Labor and Welfare (Ref. 5).

_ 26 _Glycative Stress Research

the rest of their life. And in the end, we need to ask if the
spending they can afford is enough for them to live happily
and comfortably.
However, a problem that we encounter in this assessment
is that there is no way of determining how much spendingis needed for a happy and comfortable life. It is possible tocheck the data and find how much spending is being doneby the elderly and how much of their savings is being used
to cover the gap. This was done by a working group of thegovernment -sponsored Financial System Council. In its
report published in 2019 7), the working group estimated thatthe monthly income-spending gap of a typical elderly couple
was about 50,000 yen, and argued that to finance this gap
for 20 -30 years, the couple needed financial assets of 13-20
million yen.
This report 7) analyzed various aspects of asset holdings
and management in an aging society, and made usefulsuggestions and recommendations. And the estimated needfor asset holding of 13-20 million yen was just a very smallpart of the report. However, the number “ 20 million yen”
triggered a strong political reaction, which resulted in thegovernment’s unprecedented refusal to accept this report.
The reason why the issue became so politicized was
because the use of a “typical” household was seen to be
misleading. Each household’s spending depends a lot on
its specific circumstances. For example, its spending needs
are affected by whether it owns or rents a house, healthconditions of household members (the different need for
medical and old-age care expenses), and the household’s
location (different costs of living between big cities andrural areas). Also, how much spending is enough to live a
happy and satisfactory life is subjective. If we want luxury,
no amount of savings is enough, while if we are satisfied
with life we can afford with our pension, there is no need forlarge savings. In the end, one can say happiness comes fromwithin, and not from money we own or goods we buy.

Table 1. The elderly’s financial asset holdings in 10,000 yen.

Households with
two or more persons
Single-personhouseholds

Head ofhousehold’s age

MeanMedian

60’s

1,745

875

70 or above

1,786

1,000

60’s

1,305

300

Source: Central Council for Financial Services Information, “Public
Opinion Survey on Household Financial Assets and Liabilities”, 2020.

numbers in Table 1 imply that one half of the surveyed elderly
households own financial assets of this much or less.
※ 2 The overall dependency ratio that includes population under 15 in the
numerator is expected to reach 95% by the mid-21st century. Therefore,
the burden to be put on the working age population will be even heavier.
※ 3 The “elderly household” is a household that consists only of theelderly (65 years old or older), or a household with the elderly and theunmarried young (younger than 18).
※ 4 “Earned income” includes wages, business profits, income fromagriculture and animal husbandry, and income from cottage work.

How can we assess the elderly’s economic
conditions?
We have seen the elderly’s income and their savings andfinancial asset holdings that can supplement their income
if needed. To assess their economic conditions, we need toknow; their spending needs; to what extent these needs arebeing covered by their income; and if there is a shortfall,
whether they have sufficient assets to cover the gap forSomewhatcomfortable

Hard（54.4%【56.5%】）
Very hard
All households

Somewhat hard

Neutral4.7【4.5】

39.9【38.4】

32.6【33.1】

21.8【23.4】（51.7%【52.0%】）

Elderly households

19.7【20.9】

31.9【31.1】

42.9【43.4】

41.9【45.1】

0

10

20

2.9【0.9】
10.4【16.4】

44.8【37.6】

30

40

Fig. 4. How the survey participants describe their life.

50

0.7
【0.3】

35.6【33.7】（86.7%【82.7%】）

Fatherless families

1.0
【0.6】
3.3【4.0】

34.9【35.2】

25.5【26.8】

1.0
【0.6】
4.4【4.0】（60.4%【62.0%】）

Households with children

Very comfortable

60

70

80

90

100%

Values for 2016 exclude data for Kumamoto Prefecture. Parenthesis【 】shows values in 2016. The figure quoted from2019 Comprehensive Survey of Living Conditions, Figure 16, by Ministry of Health, Labor and Welfare (Ref. 5).

_ 27 _

Economic Consequences of Anti-Aging

But there is a clue in the Living Conditions survey 5) thathelps us assess the elderly’s economic happiness and comfort.
It asks how the survey participants describe their life, andtheir answers are shown in Fig. 4. About half of the elderly
responded “very hard” or “somewhat hard”, which is aworrisome result. But the share in the elderly of those feeling
hardship is slightly lower than the share in all households,
so it is not the case that the elderly are put in a particularly
difficult situation.
Another clue is found in a survey conducted by a lifeinsurance company (MetLife (2021)) 8). When asked what
worries them most about their old age, 60 -70 % of the
respondents in their 20’s through 50’s cited “money”, and thiswas the highest share among the candidates for the source ofconcern ※ 5. However, only about 45 % of the respondents intheir 60’s and 70’s chose “money”, and this share was no. 4
after “health”, “dementia”, and “care of oneself ”.
In light of these, we may be able to conclude that atleast at present, the living conditions of the elderly are
not “very hard”, and the main target of economic policy
should be some other groups, such as fatherless families
whose difficulties are clearly indicated in Fig. 4. If we take
COVID -19’s adverse impact into account, pensioners are
relatively less affected. The hardest hit are those without
permanent employment and service firms whose businesshas been seriously undermined by the restricted movementof people. Public support should be directed to these
individuals and firms for the time being.
※ 5 Multiple answers are allowed, so other sources of concern are alsochosen by the respondents.

90

Economic policy issues brought to the foreby population aging
The assessment made above is likely to change
substantially in the future. The financial foundation of public
pension that accounts for a large part of the elderly’s income
is weak, and the amount the future elderly can receive is
expected to dwindle. To minimize this dwindling while
avoiding excessive increases in the working age population’s
burden in the form of their contributions to the pension
system, financial support from the national budget has toincrease. This would be fine if the national budget was soundand capable of covering the funding gap that is expected
to be very large and last for a long time. But Japan’s publicfinances are the polar opposite of this, being the worst in
the world ※ 6. How to cope with this ever worsening fiscal
condition is a grave policy challenge that will affect not justthe elderly but the entire population. Unfortunately, however,no effective counter-measures are being implemented, andare not even anywhere in sight.
If we cannot count on pension receipts in the future,
we will have to continue working after 65, or save morewhen young to prepare for our life after retirement. Of
these, the tendency of the elderly to continue to work isalready clearly visible (Fig. 5 ). Keeping in touch with thesociety through continued work is likely to be desirable forthe elderly’s mental and physical health. Also, utilizing theelderly labor force helps slow down the expected contractionof Japan’s potential output to be caused by the steadily
shrinking working age population. This is desirable from amacroeconomic point of view ※ 7. Therefore, policies that

( %)

Age

80

The workforce population ratio

70
60
50
40
30
20
10
0

2002

2004

2006

2008

2010

2012

Fig. 5. The workforce population ratio.

2014

2016

2018

2020

( Year )The workforce population ratio is the sum of workers and the unemployed divided by the total population of each age group. The reason
the unemployed is included in the numerator is because the unemployed is defined to be “ready to work and seeking a job or preparing tostart a business”. The figure quoted from Annual Report on the Aging Society, Figure 1-2 -1-11 by Cabinet Office (Ref. 2).

_ 28 _Glycative Stress Researchsupport the elderly’s participation in the labor market should
be promoted as the government’s top priority.
If these policies succeed in facilitating the elderly’s
labor participation, there still remains a number of serious
problems. First, even if the elderly’s healthy life expectancy
is extended thanks to anti-aging medicine, a certain periodof not-so-healthy life will be unavoidable. Then, as thenumber of the elderly steadily increases, so will be the needfor medical and old-age care. On the other hand, Japan’s
working age population will shrink over the next several
decades, much more rapidly than any increase in the elderly’s
labor participation can offset. As a result, we are bound tosee a chronic and serious shortage of care workers. To easethis, and also to meet labor demand in other areas of work,
there is no effective way other than to substantially increase
the number of foreign workers ※ 8.
In utilizing more foreign workers, we should be awarethat we do not import labor service just as we import goods;
rather, we should aim at receiving human beings. This is
not just a humanitarian consideration. We benefit more fromforeign workers by integrating them as citizens. For example,
foreigners who come to Japan to work for a limited period oftime strive to maximize the amount of money they take backhome, so they spend as little as possible during their stay. But
those who come to Japan to settle down will spend money
in Japan as Japanese do, and thus contribute not only to theeconomy’s production but also to aggregate demand.
In order to slow down the rapid transition of Japan’s
population toward an elderly-heavy structure, we need amajor policy change from labor import to immigration, sothat workers from abroad settle down in Japan and becomea part of our society and economy. This is no easy task
politically, but we see no way around it.

Second, even if working opportunities increase for theelderly in the future, many elderly people will not be able tocontinue working for various reasons. Even if they do, they
may not be able to earn enough income to satisfy their basic
economic needs. Moreover, the record of pension premium
payment shows that more than 10 % of all pension members(about 7 million individuals) are either “ fully exempt frompremium payment or premium obligation suspended ” or“ failure to pay premium” 9). When old, these individuals will
receive no pension or have their pension reduced. For thesereasons, it is likely that there will be an increasing numberof the elderly poor in the future.
Public support for the poor is provided through social
welfare programs ※ 9. The programs are not just for theelderly, but the elderly households’ number and share are
rapidly rising among social welfare recipients, and they now
account for more than half of the households covered bysocial welfare ( Fig. 6 ) 10). Therefore, as Japan’s population
ages further, there may be a need to revamp social welfare
programs. Against this background, let us discuss the “ricesic” income idea proposed by Yonei (2021) 1).
※ 6 Japan’s public debt- GDP ratio is 240 %, and its world no.1 status iseven more definitive than in the ranking of the old-age dependency ratio.
※ 7 Slowing down macroeconomic shrinkage slows down the erosion oftax base as well. This is important to ameliorate the worsening of publicfinances.
※ 8 Measures to stop and reverse the declining birth rate are so far
not bearing visible fruit, and even if they succeed, it is decades fromnow that we see its impact on the labor market. We do not deny theimportance of these measures, but one cannot count on it as a solution
to the problem of labor shortage.
※ 9 In addition to social welfare programs, unemployment insurance
provides relief for difficulties due to job loss. However, its relevancefor the elderly is probably less than social welfare.

(%)

110

60

100

55

90

50

80

45

70

40

60

35

50

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

NumberRatio of elderly households

Number of elderly households(x 10,000)

30

Ratio

Fig. 6. The number of elderly households under welfare programs and their share in the total
households covered by the programs.
The number of elderly households ( l.h.s. in 10,000). The share of elderly households (r.h.s. in %). The figure
prepared by the author based on Public assistance recipients survey by Ministry of Health, Labor and Welfare(Ref. 10).

_ 29 _

Economic Consequences of Anti-Aging

What is “ basic income ” ?
There are several requirements for social welfare
programs. First, they should deliver necessary support tothose who need it. This requirement implies that they do notdeliver to those who do not need support, which is importantto economize on limited fiscal resources. Second, theyshould minimize the cost of administration. If this cost islarge, resources that can be used for the poor are diverted
and the objective of public support is undermined. Third,
they should contain a mechanism that encourages support
recipients to stand on their feet. Public support must be atemporary help available only until the recipients can live
their life without it. Designing programs that satisfy thesethree requirements is not easy. In particular, there is a tradeoff between the first and second requirement, because acareful check of who does or does not qualify for public
support raises administrative costs.
“Basic income” is a dramatically different approach
to public support. It provides a certain amount of money toall individuals, young or old, with no eligibility conditionattached and on an ongoing basis (i.e., for an indefinite periodof time). This “certain amount” is case-by- case, but if theamount the poor are receiving under the current programs is
to be provided as basic income, it will be around a million yen
per person. No eligibility condition means that no checkingof each recipient’s income or asset holding is carried out.
And since money is provided on an ongoing basis, there is no
mechanism that induces the recipients to do without public
support and live on their own.
A number of questions immediately come to our mind.
Why is money given to all, including those who do not needsupport? Since the number of support recipients increases
dramatically, the resulting fiscal cost will be enormous.
How can the government finance it? If all receive moneythat is enough to sustain their life, won’t many of them lose
incentive to work? How will basic income affect wages
and inflation? Won’t wages fall or inflation pick up? The
proponents of basic income offer plausible answers tothese questions 11) ※ 10. Therefore, unlike its irrational andunrealistic appearance, basic income is not a fundamentally
flawed policy. Still, if it is to be introduced, a major reformof the existing policy framework will be necessary, includingthat of social welfare and taxation.
Pros and cons of basic income have been debatedfrom different angles, including politics and philosophy. But
viewed from economics and economic policymaking, andin relation to the question of how to deal with social andeconomic problems arising from an aging population, we
believe that one of the most important implications of basic
income is that it links social welfare and taxation. It is not
the case that basic income should necessarily be financed byheavier tax. But given the sheer size and permanent natureof needed finance, there is no other way than to increase
taxation ※ 11. As the population ages, fiscal costs from not
only social welfare but also pension, medical care, andold -age care are expected to increase very substantially.
Therefore, sooner or later, taxation needs to be fundamentallystrengthened. However, as the recent history of consumption
tax in Japan demonstrates, a reform focused on tax tends toattract staunch resistance, and is often derailed or delayed.
If a tax reform is proposed along with basic income, theinevitability of heavier taxation may be clearly understood by
the public, and a momentum to accept it as part of a policy
package may be generated.
One additional point we would like to make is about
the COVID-19 measure in 2020 that distributed 100,000
yen to all individuals living in Japan. Initially, this measure
was proposed as targeted hand-out of 300,000 yen to thosehouseholds whose income had fallen due to the pandemic.
But in the end, a lower amount was given to everybody. Thismeasure is sometimes justified as a “ kind of basic income”,
but this is not correct. Basic income is a comprehensive
reform that encompasses its finance and restructuring of
the existing welfare programs. But the measure in 2020
mimicked only the “same amount of money to everyone”
part of it. In light of the urgent need for income support felt
at that time, resorting to such an untargeted measure may
have been excusable. Still, it was a populist policy in nature,
and was inconsistent with the principles of the existingsocial welfare framework.
In order to avoid repeating a measure like this in the
future, efforts should be made to improve social welfare
administration so that better - targeted, and hence more
efficient public support can be provided promptly. However,with little progress made on this front, another measure wasintroduced late last year that distributed 100,000 yen to allfamilies with children of 18 years old or younger, regardlessof how poor or well-to-do they are. These cases clearly
indicate that there is a risk that “quasi basic income” policythat involves only the “cash handout to all” part is used forpolitical convenience.
※ 10 Manybooks and papers are being published by basic-income
proponents. See, for example, a book by Standing G (Ref. 11).
※ 11 A version of “tax credit”, which has an effect similar to basic income
and is often proposed as its more realistic alternative, explicitly links
social welfare and taxation.

What about “rice-sic” income?
Yonei (2021) 1) advocates basic income not in the formof money, but in the form of a coupon that can be exchangedfor 100,000 yen of rice. His rationale is, first, that with this“rice-sic income”, no one has to worry about starvation.
And second, this form of social welfare also supports ricegrowing farmers and helps establish revitalization of Japan’s
agriculture as national priority. We now examine Yonei’s
interesting proposal, first from the consumer side, and thenfrom the rice-growing farmers’ side.

1) Support for consumers
In general, for the same amount of budget, distributionof a particular good or that of a coupon exchangeablewith it is inferior to distribution of money in terms of its
effectiveness ※ 12. This can be explained as follows.
Suppose a consumer receives a particular good worth
100,000 yen, or a coupon that can be exchanged with it.
This consumer chooses his consumption mix that consists of
100,000 yen-worth of this good and other goods that he buys
using his own income, maximizing his economic welfare.
Call this consumption mix “A”. For the ease of explanation,_ 30 _Glycative Stress Researchsuppose the good (or coupon) to be distributed is rice (orrice coupon). If the consumer receives 100,000 yen of cash
instead, he can spend it all to buy rice and obtain the same
consumption mix as A. But he can also spend it to buy
something else, which enables him to choose many different
consumption mixes. He compares economic welfare hecan enjoy from these mixes, and chooses the one that gives
him the highest welfare. If his choice happens to be A, thegovernment’s support in the form of rice or rice coupon is
as effective as in the form of cash. But in most cases, there
will be consumption mixes that bring higher welfare to theconsumer than A.
The government expends 100,000 yen per person when
it buys rice to be delivered or when it redeems the rice
coupon presented by rice retailers. Thus, the fiscal cost is
the same as when the government makes a cash transferof 100,000 yen. This means that, for the same fiscal cost,
distribution of rice or rice coupon achieves less consumer
satisfaction than a cash transfer.
According to the Ministry of Agriculture, Forestry
and Fisheries’ “2020 Food Demand-Supply Table” 12), each
Japanese annually consumes 56 kg of rice on average, whichroughly translates into 24,000 yen of spending on rice. If
100,000 yen-worth of rice or rice coupon is distributed,
most Japanese will not be able to fully consume it. Thisimplies that the consumption mix, A, mentioned above is
not desirable for most Japanese.
Yonei (2021) 1) argues that in this case, consumers cansell their rice coupons, or exchange them for other goods, toachieve better consumption mixes. However, since supply ofrice coupons far exceeds their demand, the market price of
coupons will plummet. The lower market price shows thatthe coupon’s value for consumers is well below its face valueof 100,000 yen. This is another way by which we can seethat consumers do not receive benefits commensurate withthe fiscal cost.
The policy mentioned earlier to support all householdswith children was supposed to be implemented throughdistribution of coupons usable only for education-related
expenses. But a large amount of administrative costs
expected to arise from printing and distributing coupons
led to a surge in protests and complaints, so the central
government had to concede and allow cash transfers as
well. In the end, most local governments in charge of themeasure’s administration seem to have chosen cash transfers.
As we explained above, apart from administrative costs,
coupon-based support under which the recipients’ use isrestricted to certain types of spending is an inefficient
policy for satisfying households’ needs. This type of policy
is also found in regional promotion coupons, “ GoTo travel ”
subsidies, and the lower rate of consumption tax applicable
to food items. These are all examples of fiscal resources
spent for inefficient or unfair policy measures.
※ 12 “Effectiveness” is measured by the extent to which each support
measure increases economic welfare of the receiving consumers.

2) Support for rice-growing farmers
Even if distribution of a particular good or a coupon
whose use is limited to it is inefficient in supporting
consumers, it will benefit the producers of the good. Since“rice -sic income” subsidizes rice consumption, it will
stimulate demand for rice and help rice-growing farmers.
Therefore, if supporting farmers is an important policy
objective, distribution of rice coupons is a possibility ※ 12.
However, in this case, one needs to ask how importantfor Japan it really is to support rice farmers. Economics tells
us that it is best to expand domestic production of goods thata country can produce efficiently, while importing goods
that foreign countries can produce more cheaply. Rice is atypical example of goods foreign countries can produce morecheaply and efficiently, but Japan has long protected rice
farmers. In trade negotiations, the Japanese government hastreated rice as “sanctuary”, and when it manages to push backother countries’ demand for rice market access, it is reported
back home as a great victory. But from the viewpoint of
economics, this is as perverse as celebrating a self-inflictedinjury. Even if we are to promote our primary industry, thetarget should not be rice, but other primary products whose
quality is internationally high and whose export is expanding,such as fruits, fishery products, and beef.
One can raise a geo-political objection to the economicsbased argument made above. Japan’s food sufficiency ratio
is very low, so our food security is exposed to risks frominternational conflicts or disruptions of overseas foodproduction for various reasons, including climate change.
In view of these risks, maintaining or expanding domestic
staple food production may be strategically necessary. To thisview, we would like to present the following (perhaps not
so politically correct) analogy.
Japan has in its neighborhood two countries that own
nuclear weapons, one of which is launching one missile
after another toward us. One option we have to deal withthis situation is to fundamentally strengthen our military
power, possibly putting an end to our traditional “no nuclear
weapons” policy. But this is not the only option. We canrely on our allies’ nuclear power and its deterrence effect.
We can work closely with other countries in the region to
put diplomatic and other pressures on the hostile countries
to keep their action in check. Many Japanese would preferthese options to the military one. Similarly, our option
for addressing the risks to food security is not limited tostrengthening domestic production. We could diversify
sources of food import, play an active role in preventing
international conflicts that may disrupt trade, and contributeto global efforts to slow down climate change to minimize
its adverse effect on overseas food production. We cannot
judge how effective these alternative options are. But atleast, they can be pursued without contravening the logic ofeconomics.
※ 13 Similarly,

if the main purpose of offering public support tohouseholds with children is not to satisfy their economic needs but toincrease their education spending so as to strengthen Japan’s future
human capital, limited-use coupons make more sense than cash.

Concluding remarks
In this paper, we took a cue from Yonei (2021)’s thoughtprovoking idea 1), and reviewed economic policy issues posedby the aging population in Japan, a phenomenon which islikely to be accelerated by anti-aging medicine. In addition_ 31 _

Economic Consequences of Anti-Aging

to those discussed in this paper, there are many other issues
in which economics and anti-aging interact with each other.
For example, how to meet the medical and old-age care needs
expected to increase in the future (health economics), how topromote the elderly’s labor participation (labor economics),
how to cope with pressures on central and local government
budget finance (public economics), the role of savings andinvestment that support our life after retirement (finance),
the impact of population aging on macroeconomic variables
and balance of payment (macroeconomics, international
economics), how population aging affects cities and rural
areas (urban and regional economics), and the effect of theaging of farmers on agriculture (agricultural economics).
There are indeed so many areas where economics cancollaborate with anti-aging medicine.

Conflict of interest
The author does not claim any relevant conflicts ofinterest.

Acknowledgement
The publication of this study was supported by the
Isyoku-Dogen Research Foundation ( IDF# 22005).

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