CIRJE-J-16. Saguchi, Kazuro, "The History and Institutions of Retirement in Japan", June 1999.

The mandatory retirement system(MRS) in Japan was created without the tradition of employment security immediately after WW‡U. This process was the compromise between the desire for employment security among workers and the necessity of employment adjustment for managers. Therefore, the MRS in Japan had to be reinforced by the lump sum retirement allowance and the support from the family members after retirement. The institutional characteristics(not �gsocialized�hbut �g private�h) of retirement process in Japan was embedded at this time. The other institutions of employment system, for example, age-based wage system , were formed , having organic relations with the MRS in 1950s. Moreover, retirement process became more�gforeseeable�hand adaptable for Japanese workers by the creation of employment adjustment rules and the raise of retirement allowance in 1960s. However, the institutional characteristics could not change. The instability of MRS in Japan revealed itself when managers were faced with great need for reduction of aged workers in 1980s.