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Data and anecdotal evidence suggest that Japan is suffering from labor shortages, which are large in an international perspective, have a negative impact on potential growth, and reduce the effectiveness of monetary and fiscal stimulus. This paper focuses on policy options to ease Japan’s labor shortages. In particular, we focus on possible measures to increase reliance on foreign labor. Other policy recommendations to deal with shortages include policies aimed at increasing female labor participation, encouraging wage growth, increasing investment, as well as training and other active labor market policies.

Labor --- Emigration and Immigration --- Macroeconomics --- Labor and Demographic Economics: General --- Demand and Supply of Labor: General --- Geographic Labor Mobility --- Immigrant Workers --- Labor Force and Employment, Size, and Structure --- International Migration --- Labor Economics: General --- Labour --- income economics --- Migration, immigration & emigration --- Labor shortages --- Labor force --- Foreign labor --- Labor markets --- Migration --- Labor market --- Emigration and immigration --- Labor economics --- Japan --- Income economics