To analyze the sustainability of a social security system, it is necessary to make long-term forecasts of the economy and the population for 50 years or longer.

• Position: Conferences

To analyze the sustainability of a social security system, it is necessary to make long-term forecasts of the economy and the population for 50 years or longer. However, it is not possible to predict such a long term because of uncertainty over future circumstances. Fukui and Iwamoto discuss this and consider possible improvements for government forecasts and some ideas for social security reforms. They assume that all present factors except population structure will be sustained in the future. They project the labor force, economic growth, health care expenditures, and long-term care costs mechanically, rather than constructing a sophisticated model for forecasting. Their estimates of health care expenditures and the long-term care service costs are roughly consistent with those estimated by others, and are a bit less than the projection made by the...