Social Security is on the agenda of politicians, economists and journalists, and a subject of discussion and scrutiny in Germany and Japan. In Germany the political parties, as well as think tanks, industry associations and labour unions, are increasingly taking up the topic. On Jan. 28, 2026, the governing coalition of the Christian Democratic Union (CDU) and the Social Democratic Party (SPD) received a report on the Modernization and Digitalization of the Welfare State with 26 concrete recommendations.[i] The Commission entrusted with producing the report argues for a fundamental modernization of the social welfare system, particularly of the country’s pension and health insurance systems. While some experts are calling for a paradigm shift, dramatic changes are not expected due to the current power balance.[ii]
Japanese voters have given Prime Minister Sanae Takaichi and her Liberal Democratic Party a resounding victory with a two-thirds majority in the elections to the Lower House of the National Diet on February 8, 2026.[iii] With real wage growth in negative territory due to living costs outpacing pay, a consumption tax reduction was a major topic on the election trail. Be that as it may, financing the ever-increasing costs of Japan’s ageing society has its firm place on Prime Minister Takaichi’s agenda and Japan’s ‘budget-savvy housekeepers’ (aka Mr. and Mrs. Watanabe) are well aware that cutbacks in social security outlays and increases in healthcare out-of-pocket expenses are in the offing.[iv]
Societies which are associated with the “welfare state” are seen to be at a major turning point with increasing calls for major changes and a “paradigm shift” to secure the future viability of social security systems. Steering us on the way through this difficult terrain are think tanks, research commissions, and legislative initiatives, observed and nudged by the media, while the general public is pondering its best options. One senses the increasing gravity with which political, economic and societal actors, stakeholders and researchers engage with the economics, sustainability, equality and future of the issue. All the while the younger generation questions the equity of current social security systems.[v]
Stepping back from the easily politicized debates, everyone agrees that the 21st century is being shaped by major demographic trends such as ageing populations, continuing urbanization with shifts to metropolitan areas, migration within countries and across borders, and increased diversity that is reshaping cultural norms and social dynamics. In Japan and South Korea, as well as in Germany and other European nations, the rapid ageing of the population and uninterrupted decline in birth rates is giving rise to “super-ageing” societies with 20% or more of their population over the age of 65 years.[vi]
Super-ageing societies face serious economic, fiscal, labour market and social issues. They face major shifts in the work force with the retirement of the postwar baby boomer generations, ultra-low birth rates that are insufficient to make up for the overall decreasing populations, and burgeoning social security expenses contributing to increasing public deficits, with higher insurance premiums and taxes burdening the remaining working population and corporations. These problems are accompanied by labour shortages across all sectors of the economy, but specifically in the healthcare and nursing professions needed by this ageing population. All these factors are now creating major headaches for policy makers, practitioners, and the ageing citizens of these societies, even though the challenges have been seen coming for many years.
Japan, a frontrunner “super-aged society”[vii], offers insights through the way in which it is tackling the challenges brought about by the ongoing and future demographic changes. Radical changes are difficult to propose, enact and digest, considering the impact on stakeholders and on social security systems that have grown over many years and need to work and be trusted by generations of citizens. However, incremental change may not be enough to sustain these systems now. All this requires prudent economic and fiscal decisions, societal consensus and cohesion between the older and younger generations, strong political will from leaders, investments in health care innovation and — last but not least — healthy lifestyle choices.
We first assess where Japan stands in terms of demographics, both current and forecast, and then look at the making and coming of age of Japan’s Social Security Systems and its “welfare state”, reviewing its social security systems and the benefits and services its people need to “live healthy and secure lives”, the purpose of social security.[viii] At times we shall compare the situation with that in Germany, which after decades of social and political stability faces similar challenges to its economic, social and political “social market economy” model. The challenges Japan and Germany face as super-ageing societies provide ample room to learn from each other’s approaches.
[i] Presse- und Informationsamt der Bundesregierung, “Kommission legt Bericht vor. Der Sozialstaat soll effizienter werden”, 27.01.2026
[ii] Frankfurter Allgemeine Zeitung: Patrick Bernau, “Streit in der Union: Die Rentengrafik, die Merz ärgert“, 24.11.2025; and Handelsblatt, „Rentenreform - Kritik am Rentenvorstoß von Merz - auch von der SPD“, 03.02.2026
[iii] The New York Times, “Japan’s Leader Wins in a Landslide, Clearing Way for Hard-Line Agenda”, 08.02.2026
[iv] Jesper Koll, “Beyond the Takaichi Trade”, 7.2.2026, japanoptimist@substack.com
[v] Frankfurter Allgemeine Zeitung: Oliver Georgi ..., „STREIT IN DER CDU - Die Jungen haben genug“, 20.02.2026
[vi] United Nations, Department of Economic and Social Affairs (UN DESA), World Population Ageing 2023, New York.
[vii] Coulmas, Florian, Population Decline and Ageing in Japan: The Social Consequences. Routledge, London & New York, 2007.
[viii] Mukuno, Michiko & Tanaka, Kohtaro, Guide to Social Security, Yuhikaku, 22nd ed., 2025, p. 286.
The views, conclusions and recommendations expressed in this report are solely those of its author(s) and do not reflect the view of the Konrad-Adenauer-Stiftung, or its employees.