December 30, 2005

NRN: Are not politicians accountable?

Says Blaming IT Industry Will Not Help; Leaders Should Clean Up The System


Bangalore: It could have been a pure coincidence but even as the Panchayat poll results poured in, IT czar N R Narayana Murthy tore into the political system, calling it inept in handling the vast changes to achieve a sustained economic growth and end poverty in the country.
Infosys chief mentor Murthy appeared to have picked up the issue left behind in his spat with former PM H D Deve Gowda, who said IT companies were not creating enough jobs and giving back to the society. He had also accused Infy of land-grabbing. Murthy had denied the charges in a long written rebuttal.
“Politicians must learn to respect those who create jobs,’’ he said at the valedictory of the 2nd international alumni meet organised by the National Institute of Technology’s Bangalore chapter.
Then, he declared: “There is no point in blaming the IT industry for city’s woes. It’s their responsibility in fact to plan the city better because they have sought power, they have sought seats.’’
“Just as I will be held responsible if Infosys does not do well, the politicians must take responsibility if the city does not do well, state does not do well, country does not do well.’’
“Our institutions — from our Parliament and legislatures to our courts and distribution systems — have become pervaded with corruption,’’ Murthy said.
Indians, Murthy said, spent over Rs 21,000 crore in bribes and illegal payouts in 2004 — close to 1% of the country’s GDP. He said India’s private radio stations are only allowed to broadcast entertainment, and not news and informational programmes. “There is absolutely no good reason for this restriction. Only reason is they (politicians) do not want the poor people to know what’s happening in the country.’’
He said radio is a low-cost media with the highest penetration in India — it reaches 27 of every 100 households in the country. It is easily accessible to low-income, illiterate people, and can be an important source of knowledge, news and information.
Stating that India’s political and economic systems today are plagued with problems and inefficiencies, Murthy said elections in the country are determined on the basis of caste and religion, rather than real-life issues and concerns of the people.

How have we performed so dismally in achieving our objectives of broad-based economic and social development? 
India has the highest percentage of reservation in the world - it is the only country where merit has been relegated to second place. There is a strong incentive for our politicians to maintain the current status quo by keeping people ignorant and illiterate.

December 29, 2005

Funeral business too undergoes restructuring in Japan

For a while I wondered why the cost of Japanese funerals was so high. About 6 months earlier I read about an account of a guy who loses a loved one in Japan. The expenses come upto 25000 $. This experience left him with bad feelings about the funeral services in japan.
Now the site- reports that the funeral business is undergoing a restructuring like many other japanese businesses. And who's leading this? Foreigners who are fed up of getting shafted with 5 digit funeral bills.
Japan: The Death Biz Isn't What It Used To Be
Outsourcing enables American startup to enter Japanese funeral services industry
American business models have been used as levers to open many industries in Japan to participation by foreign firms, from toy retailing to fast food restaurants and from consumer banking to direct selling of computers. This case describes the efforts of All Nations Society to apply an American approach to outsourcing, pricing, and service bundling in the very traditional industry of funeral services so as to create a competitive advantage for itself against companies that practice opaque pricing and have high overheads.
Foreigners breathe new life into Japanese funeral business

It wasn't all that long ago that Japan was accused of closing its markets off to foreigners. But now, Yomiuri Weekly (1/1) says, there's a lucrative business Japanese are actually dying for foreigners to get into -- literally.

Average Japanese funerals cost enough to make the deceased roll in their graves. Costs often run well into the millions of yen and bereaved families are often so fraught with dealing with the loss of a beloved one, they pay out whatever and whenever the undertaker demands.

In fact, a Fair Trade Commission study found that 96 percent of consumers felt that they were not in a position to get selective about the funeral business they chose to use, while 36 percent didn't even receive a quote for services before they were charged.

That's where people like John Kamm and the All Nations Society come into it. Kamm has a postgraduate degree from prestigious Waseda University and studied the Japanese funeral business.

"Conditions are surprisingly close to what they were in the United States in the 1980s," Kamm tells Yomiuri Weekly.

Kamm introduced the idea of pre-need funerals into Japan. His All Nations Society allows people to decide what type of funeral they'd like to have while they're still alive -- a concept that spread widely in the U.S. two decades ago. Doing so, the weekly says, allows bereaved families not to fall victim to preying undertakers.

All Nations Society offers ceremony packs. A 10,000 yen membership while still alive entitles the buyer to such funeral packs as the 850,000 yen service that covers cremation, funeral hall costs, a hearse, a prayer altar, urn for ashes and commemorative photo. There are, Kamm says, no other costs.

All Nations Society can even provide single day funerals (most death ceremonies in Japan run for at least a few days) for a bargain basement 350,000 yen, almost a quarter of the average 1.4 million yen most Japanese funeral operators charge.

"Sometimes, the amount demanded for the cost of an urn for ashes can be really expensive, but the actual cost of the urn is cheap," Kamm tells the magazine. "If you act according to your conscience, it's possible to provide a cheap funeral service."

Kamm says All Nations Society has set up more than 2,000 funerals in advance since starting business in Japan in November 2003. He says that the biggest problem with Japanese funeral operators is collusion.

"They only ever use the same florists, the same transport companies. Funeral prices are set like a cartel," he says.

A desire to provide something more individual, away from the norm helped inspire Taiwanese native Fumitada Naoe to establish Sanctuary a couple of years ago. A tragic end to the life of his first love provided the final step for him.

"At her funeral, her commemorative photo was displayed on an angle. Neither the priest giving the service or the funeral operator straightened it," Naoe says. "I thought that was a terrible insult."

He took out his frustrations by taking business off Japanese undertakers. Sanctuary's basic payment plan offers four types of increasingly elaborate funeral services whose costs range from 400,000 yen to 1 million yen, while on top of that are customized plans promising a ceremony celebrating the dead person's character and tastes at a cost of anywhere from 1 million to 3 million yen.

Midori Kotani, a Dai-Ichi Mutual Life Insurance Co. Economic Research Institute researcher well versed in the Japanese funeral business, says more foreigners like Kamm and Naoe are not the only changes people in the death trade are likely to see.

"Japan's funeral services are going to become a lot more varied," she tells Yomiuri Weekly. "You're going to see more hotels, restaurants and florists get involved." (By Ryann Connell)

December 26, 2005

December 26, 2005


CROOKS WITH MONEY MANAGEMENT PROBLEMS (II) A judge gave Vickey Siles of New Haven, Ind., just a suspended sentence and probation, ostensibly out of pity for the lousy job she did altering a check from Globe Life and Accident Co. Siles had tried to obliterate the "$1.00" amount of the check by typing "$4,000,000.00" over it, and then attempted to cash it at a neighborhood check-cashing store.

--Fort Wayne News-Sentinel, March 19

BLING 1, MATERNAL INSTINCT 0 Firefighters in Stamford, Conn., had to break a car window, against the owner's wishes, to rescue her 23-month-old son, whom she had accidentally locked inside along with the key. According to police reports and a 911 tape, the kid had been sweltering for more than 20 minutes on an 88-degree July day when Susan Guita Silverstein, 42 (who was later charged with reckless endangerment), asked firefighters to wait until she went home to get a spare key so they wouldn't have to damage her Audi A4.

--Stamford Advocate, July 26

DO I LOSE MY PLACE IN LINE? As a registered sex offender in California, James Andrew Crawford was required to notify authorities if he adopted a new "domicile" for more than five days. He was arrested in May for noncompliance after he camped out for two weeks in a theater line waiting for "Star Wars: Episode III" to open.

--North County (Escondido, Calif.) Times, May 19

SOON TO BE A BUSINESS SCHOOL CASE STUDY When Japanese business exec Takashi Hashiyama had to choose either Sotheby's or Christie's to sell off his company's art collection, he asked the two auction houses to play rock-paper-scissors to win the privilege. Sotheby's chose paper and lost out on the eventual $2.3 million commission. (A Christie's executive had taken the advice of one of his 11-year-old twin daughters, who said, "Everybody knows you always start with scissors.")

--Wall Street Journal, New York Times, April 29

There's more...

December 24, 2005

Mr. Cheney's Imperial Presidency

Published: December 23, 2005

George W. Bush has quipped several times during his political career that it would be so much easier to govern in a dictatorship. Apparently he never told his vice president that this was a joke.

Virtually from the time he chose himself to be Mr. Bush's running mate in 2000, Dick Cheney has spearheaded an extraordinary expansion of the powers of the presidency - from writing energy policy behind closed doors with oil executives to abrogating longstanding treaties and using the 9/11 attacks as a pretext to invade Iraq, scrap the Geneva Conventions and spy on American citizens.

It was a chance Mr. Cheney seems to have been dreaming about for decades. Most Americans looked at wrenching events like the Vietnam War, the Watergate scandal and the Iran-contra debacle and worried that the presidency had become too powerful, secretive and dismissive. Mr. Cheney looked at the same events and fretted that the presidency was not powerful enough, and too vulnerable to inspection and calls for accountability.

The president "needs to have his constitutional powers unimpaired, if you will, in terms of the conduct of national security policy," Mr. Cheney said this week as he tried to stifle the outcry over a domestic spying program that Mr. Bush authorized after the 9/11 attacks.

Before 9/11, Mr. Cheney was trying to undermine the institutional and legal structure of multilateral foreign policy: he championed the abrogation of the Antiballistic Missile Treaty with Moscow in order to build an antimissile shield that doesn't work but makes military contractors rich. Early in his tenure, Mr. Cheney, who quit as chief executive of Halliburton to run with Mr. Bush in 2000, gathered his energy industry cronies at secret meetings in Washington to rewrite energy policy to their specifications. Mr. Cheney offered the usual excuses about the need to get candid advice on important matters, and the courts, sadly, bought it. But the task force was not an exercise in diverse views. Mr. Cheney gathered people who agreed with him, and allowed them to write national policy for an industry in which he had recently amassed a fortune.

The effort to expand presidential power accelerated after 9/11, taking advantage of a national consensus that the president should have additional powers to use judiciously against terrorists.

Mr. Cheney started agitating for an attack on Iraq immediately, pushing the intelligence community to come up with evidence about a link between Iraq and Al Qaeda that never existed. His team was central to writing the legal briefs justifying the abuse and torture of prisoners, the idea that the president can designate people to be "unlawful enemy combatants" and detain them indefinitely, and a secret program allowing the National Security Agency to eavesdrop on American citizens without warrants. And when Senator John McCain introduced a measure to reinstate the rule of law at American military prisons, Mr. Cheney not only led the effort to stop the amendment, but also tried to revise it to actually legalize torture at C.I.A. prisons.

There are finally signs that the democratic system is trying to rein in the imperial presidency. Republicans in the Senate and House forced Mr. Bush to back the McCain amendment, and Mr. Cheney's plan to legalize torture by intelligence agents was rebuffed. Congress also agreed to extend the Patriot Act for five weeks rather than doing the administration's bidding and rushing to make it permanent.

On Wednesday, a federal appeals court refused to allow the administration to transfer Jose Padilla, an American citizen who has been held by the military for more than three years on suspicion of plotting terrorist attacks, from military to civilian custody. After winning the same court's approval in September to hold Mr. Padilla as an unlawful combatant, the administration abruptly reversed course in November and charged him with civil crimes unrelated to his arrest. That decision was an obvious attempt to avoid having the Supreme Court review the legality of the detention powers that Mr. Bush gave himself, and the appeals judges refused to go along.

Mr. Bush and Mr. Cheney have insisted that the secret eavesdropping program is legal, but The Washington Post reported yesterday that the court created to supervise this sort of activity is not so sure. It said that the presiding judge was arranging a classified briefing for her fellow judges and that several judges on the court wanted to know why the administration believed eavesdropping on American citizens without warrants was legal when the law specifically required such warrants.

Mr. Bush and Mr. Cheney are tenacious. They still control both houses of Congress and are determined to pack the judiciary with like-minded ideologues. Still, the recent developments are encouraging, especially since the court ruling on Mr. Padilla was written by a staunch conservative considered by President Bush for the Supreme Court.

Job Satisfaction


Jobs are not meant to satisfy us. Jobs are not animate things that have knowledge of who we are, what we are seeking and what our special needs could be. You may say that I am just making a philosophical statement. To the contrary, I believe that it is the most practical and rewarding way of looking at many things in a professional career. When I see scores of successful people around me, I believe that they have gotten to where they are in life largely because of such a perspective. It also occurs to me that developing such a perspective is eventually beneficial in every way possible.
   Let me go back a century and tell you a story from my family. My grandfather was a medical practitioner in the Bihar of the 1920s. He had a brood of children who were orphaned due to his untimely death. Two of my uncles had just about finished high school when he moved on. Their older brothers could not afford to send them to college. The two had to be gainfully employed, somehow, as soon as possible. They were taken to Tata Steel, an hour away from where they lived. Tata Steel and the government of Bihar were the only two employers you could think of in a five-hundred mile radius of my uncles’ hometown. If someone were to work for Tata Steel, he had to be a technologist-engineer or just a manual worker. So what could be done with the two boys with their high school qualifications? They were neither fish nor fowl. “Take them to the Lab,” someone said. A German technician who ran the place was looking for a few hands. The burly German took a hard look at the two boys. Then he showed them a broom standing at one corner of the lab and asked them to sweep the floor. By the end of day, one of the two uncles just ran away. To him, it was too much to handle. The one who stayed back retired as a Chief Foreman of Tata Steel. The difference between the two? The one that stayed on was not trying to seek “job satisfaction”. Instead, he focused on satisfying the job.
   The more prosperous the industry, the higher is the number of people looking for this elusive thing called ‘job satisfaction.’ Similarly, the more qualified some people are, the higher is their need for ‘job satisfaction.’ Sometimes, it is as elusive as seeking “true love.” There are times when we get lucky deservedly or otherwise. But we also get used to it and conclude that it is the responsibility of the organisation to maintain a continuous supply of job satisfaction for us.
   Whenever I think of job satisfaction, I remember all the people who have to work at night — policemen, airline pilots, nurses and doctors, ambulance drivers and hotel staff, and of course the sentinel of the snow and the desert and the mountains. Do their jobs ‘satisfy’ these people or do these people satisfy the jobs with which they have been entrusted? Are jobs living things that can ever “satisfy” us?
   In the corporate world, like any other place, when we open the bonnet and look under it, we find a whole bunch of tough, dirty but strategic tasks that must get done for the bacon to come home. Sometimes, they are so tough and so dirty that they overshadow the strategic nature of the job. So, all such jobs have to be ‘sold’ to prospective incumbents. More they are sold, less buyers they attract. Often, the man who takes up the job is either a loser who has no other choice, or someone who just views it as a transit camp. For many potentially high-performance individuals, a false sense of survival, desire for glamour or just the need for creature comforts make these jobs undesirable. “I would rather be in Calcutta than be posted to Mungher. I rather have the corporate planning job than be collecting bad debts.” Or, consider this one here: “Give me a cerebral job, I do not enjoy handling transactions....”
   Few of us ever ask the boss to be rewarded with a tough and dirty job. We only look for the “plum” ones. Yet, there are people, who given a tough and dirty job, make it strategic: they transform the job in unbelievable ways. In a typical career span, there must be at least four such solid stints in anyone’s life to make the person a solid professional. All the great people I know have been in the trenches for much of their lives, and their inventory of bruises outnumbers the commendations they have received. The occasional commendations stay on the wall. It is the bruises that these people carry with pride.
   Subroto Bagchi is co-founder & chief operating 0fficer of MindTree Consulting

December 23, 2005

Study Tied Pollutant to Cancer; Then Consultants Got Hold of It

'Clarification' of Chinese Study
Absolved Chromium-6;
Did Author Really Write It?
Echo of Erin Brockovich Case
December 23, 2005; Page A1

During China's Cultural Revolution 40 years ago, a city doctor named Zhang JianDong was banished to the countryside of northeastern China. He arrived to a public-health emergency.

A giant smelter was spilling large amounts of chromium waste into the groundwater. Well water was turning yellow. People were developing mouth sores, nausea and diarrhea. Dr. Zhang spent the next two decades treating and studying the residents of five villages with chromium-polluted water.

In 1987, he published a study saying they were dying of cancer at higher rates than people nearby. He earned a national award in China for his research. In America, federal scientists translated it into English, and regulatory agencies began citing it as evidence that a form of the metal called chromium-6 might cause cancer if ingested.

Then in 1997, Dr. Zhang, in retirement, appeared to retract his life's work. A "clarification and further analysis" published under his name in a U.S. medical journal said there was no cancer link to chromium in the villages after all. This new conclusion, like the earlier one, soon found its way into U.S. regulatory assessments, as evidence that ingested chromium wasn't really a cancer risk.

Yet Dr. Zhang didn't write the clarification, judging by voluminous testimony and exhibits in a lawsuit in a California state court. The court papers indicate that the second study was conceived, drafted, edited and submitted to medical journals by science consultants working for the lawsuit's defendant, a utility company being sued for alleged chromium pollution. The consultants paid Dr. Zhang about $2,000 for research assistance on the second study.

That study didn't deny that the polluted area had a higher rate of cancer deaths. But it said factors other than chromium were the likely cause. This was a statement that Dr. Zhang, now dead, had explicitly disputed in a letter to the consultants. Yet he and a Chinese colleague appeared, to anyone reading the report, to be its sole authors. The litigation consultants didn't disclose their role to the journal that published it.

For years, scientists thought chromium-6 in drinking water might, at some level of exposure, pose a cancer risk. The first Zhang study, while recognized as flawed, was one reason for this view. Now many scientists think the metal doesn't pose this risk, and once again a Zhang report is a factor behind their view. How risky the metal actually is or isn't matters, because it has shown up in soil or water in parts of 37 states, according to the U.S. Agency for Toxic Substances and Disease Registry.

Regulators in California, after investigating the second Zhang report, have concluded it is dubious. They have reverted to the original dark view of chromium-6 and are moving to propose a strict limit on it in ground water. The action could ultimately require a costly cleanup, because a third of wells tested in the state exceed the envisioned limit. Costs would grow if other states followed California's lead.

The conflicting Zhang studies show what can happen when the line between advocacy and science blurs. The consultants pursued the second round of Chinese research with the clear aim of rebutting California plaintiffs' arguments, court documents show. But once that second report entered the realm of peer-reviewed science literature, it took on a life of its own in regulatory assessments of the chemical.

The consultants who worked on the second report defend it as good science. And, rejecting the notion that they ghost-wrote it, they say that Dr. Zhang was kept informed of what it said through phone calls and through an early draft that was translated into Chinese for him.

Chromium, once hailed as a miracle metal for its corrosion resistance and durability, is part of stainless steel and has been used in countless products from jewelry to fenders, under the name chrome. The legacy of this wide use is that hundreds of U.S. industrial sites are tainted with chromium-6, also called hexavalent chromium.

Zhang JianDong

This variant -- so named because its atoms have six electrons available to interact with other atoms -- is widely used in alloys, paints and wood preservatives. It has long been known that breathing particles of it can raise lung-cancer risk, but the effect of ingesting it has been hotly contested. That's because digestion converts some into "trivalent" chromium, a form that not only isn't toxic but is an essential nutrient in minute amounts. The U.S. National Toxicology Program is currently conducting long-term rodent studies to try to ascertain at what level chromium-6 might be an oral carcinogen.

The China story is part of a more familiar one, that of Erin Brockovich, the feisty paralegal (played by Julia Roberts in the movie named after her) who helped a California town's residents win $333 million from a utility that had leaked chromium into their water. In 1995, arbitrators hearing the Brockovich case asked the defendant, PG&E Corp., about the original Zhang study. Lawyers for PG&E then assigned a consulting firm to look into it, telling the firm, as a former lawyer for PG&E recalls, "to follow up, to see if they could make contact and get some of the underlying data."

The consulting firm was ChemRisk. It was founded 18 years ago by a prominent toxicologist, Dennis Paustenbach, who has consulted for dozens of companies and serves as a Bush appointee on a board of scientific advisers to the U.S. Centers for Disease Control and Prevention. According to a tally in a textbook he edited, he helped save industry hundreds of millions of dollars in cleanup costs for chromium pollution in New Jersey. His firm was paid more than $7 million for this help, Dr. Paustenbach has testified.

ChemRisk assigned an affiliate in Shanghai to track down Dr. Zhang, and it found him at his home in JinZhou in northeast China. ChemRisk then hired Dr. Zhang at $250 a month to consult.

His 1987 study focused on five villages downstream of the JinZhou Ferroalloy Co. smelter. Village wells were polluted with chromium. His study said the contaminated area had a higher death rate from all cancers, but especially stomach and lung, than the surrounding region.

ChemRisk scientists didn't dispute that. But they sought to determine whether individual villages' levels of chromium exposure correlated with their death rates. The idea was that if chromium was really the culprit, then the death rate ought to be highest in the villages with the most exposure to chromium.

Unfortunately, Dr. Zhang's data weren't good enough to determine individual villages' exposures to chromium. So as a surrogate, ChemRisk looked at villages' distances from the pollution source -- on the theory that the shorter this distance was, the more chromium exposure the village probably got.

They concluded that cancer death rates weren't always higher the closer the village was to the pollution source. That finding led them to doubt that chromium was to blame for the five-village area's overall higher cancer death rate.

Trial Exhibits

A ChemRisk biostatistician wrote in a 1995 internal memo that he foresaw two "products" for PG&E from ChemRisk's work with Dr. Zhang. One was a report that could be the basis for trial exhibits showing "the absence of the association between cancer and groundwater exposure to hexavalent chromium," said the memo. Like many others, it is on file in state court in Los Angeles County, where PG&E -- the defendant in the Erin Brockovich case -- is again facing litigation by residents alleging chromium pollution.

The other product, wrote the ChemRisk scientist, William Butler, would be a report to be submitted to a peer-reviewed journal, with Dr. Zhang as the lead author. Dr. Butler requested a budget of $25,000, which he said would cover 60 hours of his own time to, among other tasks, "interpret data" and "write reports." He budgeted Dr. Zhang's contribution as "research assistance."

Dr. Butler added: "It is at times difficult to convince Dr. Zhang of the importance to us of the specific details of his studies so that we can execute our own analyses."

Three weeks later, ChemRisk faxed Dr. Zhang a draft of a new study of the five villages, translated into Chinese. While reiterating the overall higher cancer death rate, it offered ChemRisk's new analysis saying village distances from the smelter didn't always correlate with death rates. Dr. Zhang wrote back that "I totally agree with what you wrote: 'There is no positive correlation between cancer mortality and the distance of the village to the pollution source or the level of contamination.' "

However, Dr. Zhang had previously told ChemRisk he never tried to assert such a link. And after reading the draft, he told the firm he didn't accept its conclusion that "lifestyle of the residents and other environmental factors unrelated to chromium contamination" might explain the overall higher death rate for the contaminated area.

"This is only an inference; it is inappropriate to consider it as a cause," he wrote to ChemRisk, in a letter filed in California state court. Dr. Zhang instructed the consulting firm to replace that assertion with a vaguer one mentioning several possible variables, as well as the need for more research.

Yet the report, as later published, even more strongly linked the higher cancer mortality to lifestyle and other non-chromium factors. Instead of saying these might be the cause, the published report called them the "likely" cause.

The published report then went further and stated flatly that the higher rate of cancer death in the five villages was "not a result of the contaminated water." Neither stomach-cancer nor lung-cancer deaths "indicated a positive association with hexavalent chromium concentration in well water," the published article said. Neither of those statements was in the draft that was translated into Chinese for Dr. Zhang to read.

Did Dr. Zhang change his mind and sign on to these conclusions? Documents and testimony by former ChemRisk scientists show that ChemRisk drafted the text and graphics of the final report in English, on ChemRisk computers, three months after translating the earlier draft into Chinese. Dr. Zhang, who died in his late 60s in 1999, couldn't speak English, the ChemRisk scientists testified.

In depositions, former ChemRisk scientists acknowledged they might not have translated the final article into Chinese. But they maintained, and continue to assert, that Dr. Zhang was aware of its contents from phone conversations and from the early draft he did read. Tony Ye, a former ChemRisk scientist who speaks Chinese and served as the liaison with Dr. Zhang, testified that he kept Dr. Zhang "informed" of everything ChemRisk concluded for the article and that it was published with Dr. Zhang's "agreement."

Dr. Zhang's son, Zhang Hongzheng, bristles at the idea that his father would wittingly have retracted his award-winning 1987 findings. Dr. Zhang was "sure of the relations" between cancer and chromium-6, says the son, who says he helped his late father in the research. "My father's 1987 article won an award. It's impossible that he would have overthrown what he said. That's like saying his previous painstaking effort was a total waste," the son said in an interview.

Submitting the Study

In December 1995, ChemRisk submitted the new study of the villages to the Journal of Occupational and Environmental Medicine. ChemRisk's Mr. Ye signed the cover letter and gave his own home address and phone number as contact information, as he did in subsequent correspondence with the medical journal. His letters to the publication were written on plain white paper and made no reference to either ChemRisk or PG&E.

Asked why not, a former ChemRisk official said it was because the study was "not a work product, per se," of the consulting firm. The official, Brent Kerger, was manager of litigation services for ChemRisk, which at the time was a unit of an engineering firm called McLaren/Hart Inc. He and ChemRisk's founder, Dr. Paustenbach, both testified that ChemRisk had wanted to have credit on the paper but that Dr. Zhang told Mr. Ye he didn't want to let the consulting firm share in his authorship.

Mr. Ye, in an interview, said he didn't recall Dr. Zhang ever telling him that.

PG&E says its role should have been acknowledged when the article was published. "The lesson in this case is that it's in everyone's interest to have full transparency," said a spokesman for the utility. He added that "nothing published in the scientific literature since [1997] challenges Dr. Zhang's research and conclusions." PG&E paid ChemRisk about $1.5 million in all for litigation support, according to Dr. Paustenbach's testimony. Other court documents said that included about $20,000 for the China research.

The medical journal that published the study required acknowledgment of research support, both then and now, said its editor, Prof. Paul Brandt-Rauf of Columbia University. "It sounds like there were some things that, had I known, I might not have approved of, including not telling us who their funders were," he said.

One person who did appear on the article -- but seems to have played a minimal role in it at best -- was Li ShuKun. The article listed her as co-author. According to Dr. Zhang's son, she was his father's girlfriend and did no research. Dr. Li, a physician at a health and anti-epidemic station, wouldn't discuss her relationship with Dr. Zhang but said he asked her to write the report from his data because he was busy, and she did so, in Chinese. She said she never saw it again. Former ChemRisk scientists said they never received a Chinese draft. They testified in California court that they had no contact with Dr. Li. They said they added her as a co-author at the request of Dr. Zhang.

Broader Impact

The 1997 article began to influence scientific views. In 2000, the U.S. Agency for Toxic Substances and Disease Registry updated its chromium profile, adding a paragraph about the 1997 study. The passage concluded with the concept Dr. Zhang had pointedly rejected in his memo to ChemRisk. The entry said the 1997 study's authors "commented that these more recent analyses of the data probably reflect lifestyle or environmental factors, rather than exposure to chromium(VI)."

Soon other bodies, such as the Environmental Protection Agency and the California Department of Health Services, also cited the second study to that effect. A 2001 report by a special panel of scientists for the state of California discussed the 1997 paper and concluded there was no need to tighten chromium-6 standards.

Dr. Paustenbach, the ChemRisk founder, served on this panel. He resigned before its report was issued because of a public flap over a perceived conflict of interest, since his firm was a consultant to chromium defendant PG&E.

When the panel's report came out, Dr. Paustenbach emailed it to his former colleague Dr. Kerger, with a note: "Buy a good bottle of wine, pull up a chair...and then read this. Then, say to yourself 'Yep, I really finally did something good for society.' "

California's Office of Environmental Health Hazard Assessment had also begun looking into the 1997 study, however, and assigned an epidemiologist to review it. He found several "limitations and oddities," he later wrote. For instance, the study called for "further follow-up of this cohort," implying that it was, itself, a follow-up of a cohort of villagers, which would make it a particularly rigorous kind of study. In reality, there was no follow-up of individuals.

The state epidemiologist, Jay Beaumont, described in internal memos what he suspected were improprieties in the 1997 study. He listed them under the heading "The Case for Scientific Publication Fraud," including: "ChemRisk did virtually all the work and didn't mention themselves. Zhang maybe did no new work, yet is first author"; and, "Acknowledgement of funding not made."

Risk Calculations

Redoing Dr. Zhang's 1987 analysis in greater detail, Dr. Beaumont calculated that in the overall area with chromium-tainted well water, the odds of dying from stomach cancer were 81% higher than in adjacent nonpolluted areas and 69% higher than for the province as a whole.

Dr. Butler, the former ChemRisk biostatistician, says such a comparison isn't appropriate because the surrounding area includes an industrial town whose population isn't comparable to that of the five polluted villages, where farmers live. Minus that town, Dr. Butler said in a written reply to questions, "I see no...patterns of cancer rates that challenge the conclusions" of the 1997 study. Dr. Butler acknowledged four "minor errors" in the 1997 study that he said didn't change its conclusions.

California's Dr. Beaumont found insufficient evidence to assume that contamination was higher closer to the smelter, as the 1997 analysis did.

But ChemRisk's Dr. Kerger maintained that distance was "a reasonable surrogate for chromium-6 exposure." Using that surrogate, the 1997 report said villages where people presumably got the most chromium exposure didn't always also have the highest rates of cancer death.

In scientific terms, there was no "dose response." And this, Dr. Kerger said in his own written response, is "a critical consideration in determining the validity of a claimed association between chemical exposures and cancer."

Dr. Kerger maintained that the article didn't represent itself as a follow-up of a "cohort" of villagers. He said he would agree that use of the term "cohort" once in the study "was not an ideal choice of terms."

He added: "The bottom line is that all of the text, table and figures in the final manuscript were considered to be appropriately detailed and complete by Dr. Zhang and by the peer reviewers."

California's Dr. Beaumont has submitted his own analysis to a science journal, where peer reviewers have given him comments, according to a spokesman for his agency. California regulators have set aside the 2001 report by a special panel of scientists, partly because of Dr. Beaumont's analysis. Based on many studies besides those in China, they are expected soon to propose a "public health goal," or safe limit, for chromium-6 in drinking water.

Setting Limits

This would be the nation's first such limit focused just on the most toxic form of chromium. Currently, water standards exist only for total chromium. The EPA's is 100 parts per billion, and California's is 50 ppb. For chromium-6, California is likely to propose a safe limit of only about three ppb to six ppb, early drafts suggest.

A standard that strict could compel widespread cleanup. The metal has already been found above three ppb in more than 1,200 water sources in California. If other states or the EPA followed California's lead, treatment and litigation costs could soar nationwide.

Meanwhile, the second Zhang study is still having an influence.

Ore-processing plants in northern New Jersey once produced millions of tons of chromium waste that was used as landfill throughout Hudson and Essex counties near New York City. Chromium-6 has turned up in Jersey City Little League diamonds and, this fall, near the Weehawken-Manhattan ferry terminal.

ChemRisk's Dr. Paustenbach has been instrumental over the years in persuading New Jersey regulators to ease cleanup standards for the metal. An article he co-wrote was cited in a recent New Jersey report that concluded it still wasn't known whether chromium-6 is carcinogenic when ingested. One plank of the Paustenbach argument: that Dr. Zhang's "follow-up study" didn't find a cancer link.

New Jersey's chief risk analyst, Alan Stern, says he's aware Dr. Zhang published an earlier study tying chromium in water to cancer deaths -- the study that California regulators now believe is accurate. But, he says, "we haven't read it because it's in Chinese."

--Ivy Zhang in Shanghai contributed to this article.

Peter Waldman

December 22, 2005

Demographic Trends and Their Implications for Japan's Future

Naohiro Ogawa, Ph.D.
(Transcript of a speech delivered on March 7, 1997, at the Japan Information Center in San Francisco.)

Naohiro Ogawa: Right now there are three abnormal phenomena going on in Japan. According to the Economic Planning Agency of the Japanese government, they call it the three "two much" phenomena.

The first "too much" phenomenon is that Japanese children study too much. In Japan 1.6 million kids enroll in the Kumon program, and according to government data 48% of primary school kids go to juku. In fact, including my son, he started going to juku when he was in fourth grade. He is in eighth grade right now, but he is one year behind other kids because most of his friends started in the third grade, so he is trying to catch up with them. And this, the juku--this extra session after regular school hours--is most important. Because that is the way they study for the entrance exams. My son knows that he has to keep on doing this until he graduates from high school and until he passes the university exam. So he must attend juku virtually every day for many, many years (and I have to pay a lot of money for him). On the average, a father and his children spend only 37 minutes a day together at home. So the problem is, I think, the children are too busy.

But it is not just the children who are busy. The second "too much" phenomenon is that the Japanese people work too much. According to data, Japanese people work 1,966 hours a year. But Americans work less. And Japanese work much more than the French and Germans. Germans work 1,590 hours a year, so we work about 300 hours more than the German people.

So we're trying to reduce working hours. According to the government plan, by the end of this month, we should achieve the target of 1,800 hours a year, but it doesn't look like we are going to make it.

But anyway, the third "too much" is that Japanese old persons have too much free time. That is a big problem. According to one survey, Japanese elderly persons, particularly 70 and over, spend five-and-a-half hours watching TV every day. Five and a half. The young Japanese in their twenties spend two-and-a-half hours watching TV. So obviously the older generation spends at least twice as much time watching TV.

And we have increasing shares of elderly persons in the population; we have too many elderly persons in Japan, that is the problem.

The first slide shows the changes in the proportion of persons aged 65 and over since the Meiji period. During the Meiji period this proportion was about 5%. It was fairly stable, but when Japan made an advance and invaded China in 1935, that year had the lowest ever share of persons aged 65 and over in Japanese history, 4.7%.

Since then it has been rising continuously. In 1970 we hit the 7% level. According to a 1967 U.S. population publication, the 7% mark is a sort of cut-off for judging whether a society is aged. Japan hit the 7% level in 1970. That year, I went back to Japan to collect my dissertation data, because my dissertation was on population aging, and everybody, virtually everybody, including government officials, thought I was absolutely crazy. Japan wasn't interested in aging at that time. Pollution was the major issue.

But 10 to 15 years later, as this graph shows, the pace of aging accelerated, and people started paying greater attention to aging.

Drop in fertility

The definition of aging is fairly loose. An increase in the elderly population versus a decrease in the younger population. This means a longer life expectancy and reduced fertility.

So maybe we should look at the components of these demographic trends. The first one shows changes in fertility. Between 1947 and 1949 we had a baby boom. This is the most important message that I want to convey to you today. The Japanese baby boom was very short, between 1947 and 1949, three years. After that Japanese fertility went down. Between 1947 and 1949 we had a large number of births, something like 2.7 million a year. And after that it declined dramatically.

After 1949, Japanese fertility went down by 50% in ten years' time, which was the first such experience in the history of mankind. And so, obviously, something dramatic was going on. Up until 1950 the Japanese economy was in a shambles. I mean severely crippled. The famous demographer, Warren Thompson, went to Japan in 1947 and 1948 at the request of President Truman as an advisor for General MacArthur and looked around the country. In a report he submitted to the president, he said that Japan was hopeless. No way it could recover. But Japan might be able to export the following four items by 1970. Can you guess what they were?

Audience: Toys.

Ogawa: Toys, good guess, good guess.

Audience: Textiles.

Ogawa: Textiles, that is right. Three more to go. Okay, bicycles. And rubber shoes and truck lights. He couldn't predict automobiles. Why did he make a mistake? I mean he is a well-known demographer. Why did he make a mistake like that?

The fact is this: he couldn't predict a 50% reduction in fertility in ten years' time. He submitted the report in 1947. In 1950 Japanese per capita income was $153, which was even lower than that of the Philippines. The Philippines' per capita GNP was $172, Mexico's was $181. So Japan was behind Mexico and the Philippines. And U.S. per capita GNP was $1,883, so the U.S. per capita income was about twelve times as high as the Japanese per capita GNP.

So Japan was really in bad shape at the time, but things started getting better. In the beginning, fertility reduction was facilitated through abortion. Three-quarters of pregnancies in the first half of the 1950s ended in abortion. In the second half, 50% of pregnancies were aborted. And in the first half of the 1960s pregnancies were prevented with contraceptives.

So fertility declined, first through abortion and then through contraceptives. And as you know, the pill is still illegal in Japan. Japan is the only industrial nation which hasn't legalized the pill. But it looks like it is going to be legalized by the end of this year.

Because of the decline in fertility, Japan could manage to save a lot, and capital formation was rapidly promoted. By 1960 Japan was ready to grow very rapidly and enter the "Golden 60s." Annual per capita income growth reached 7%. Real growth was 11%, and that lasted for about ten years, which is quite impressive.

Because the baby boomers came into the labor market, we had high quality labor at a low price. Plus, there was the accumulated capital due to the births averted, and the international trade environment was excellent at the time in favor of Japanese products. Plus, we could borrow foreign technology from advanced nations. Due to the combination of these factors, Japan was able to recover quite well.

By the end of the 1960s, Japan's per capita GNP was the second largest in the Free World, which was something totally inconceivable at the beginning of and right after World War II.

But something happened in 1966. Births dropped dramatically. Why? Because it was the year of the fire horse, and according to Japanese superstition, girls born in that year will have very unhappy lives, and most likely will kill their husbands. [Laughter] So that is why parents tried to avoid births. They either had babies the year before that or the year after that.

There are two steps. Fertility dropped after 1950, held steady for a while, and it started going down again after the oil crisis in 1973.

Choosing to stay single

Let's now look at the changing methods of fertility reduction. Around 1970, a large number of births were averted with contraceptives and abortion. But in the recent past, the pattern is different. The proportion of singles has been rising dramatically in the last 15, 20 years. So the source of declining fertility is different.

Japan is quite unique in that sense. Marriage patterns have been changing. It is one of the silent revolutions underway in our country. And the question is, why?

According to the 1995 population census, 50% of women in their late 20s are single. The highest figure is Sweden's, but the U.S. is much lower than the Japanese level. And what is surprising to me is that back in 1985 the proportion of singles for this particular age group was only 30% in Japan. And in 1990, five years later it was 40%. Before 1995 I checked with all my demographer friends in the United States and England and asked them to guess the value for 1995. We had long, long discussions, and our guess was 42%. We never expected it would go as high as 50%.

Audience: Excuse me, but you are using unmarried and single synonymously.

Ogawa: Yes.

Audience: And that, I think, is where your Swedish data are misleading. Because we have many more cohabiting.

Ogawa: Yes, yes. I'll come to that later.

Yes, so in other words, over the last 15 years, every 5 years, the percentage of singles increased by 10 percentage points, which is quite shocking, even for Japanese people. So why is it that Japanese women don't want to get married? That is the question.

First of all, values are changing. According to a survey I was involved in, 75% of Japanese women in their twenties support a concept called "New Singles." This means that "I would like to enjoy the single life without worrying about marriage." And 75% of them support this idea, but in the case of men only 50%. So in other words, even when Japanese men want to get married, Japanese women may not.

This is obviously a big change in values, and the major factor behind this change has been that more women are receiving higher education, living in urban areas, and are in paid employment. As families modernize and grow more urbanized, Japanese women will be better educated and further entrenched in the labor market. And it looks like the proportion of young women supporting this idea will increase in the years to come.

Education is a big factor. Japanese women's educational levels are rising like crazy. In fact, if you combine four-year colleges and junior colleges, the proportion of Japanese women receiving higher education is 48% right now. And in the case of men it is lower, at 42%.

I did some econometric computations on this--computing the rate of return on education. In the case of women--suppose there are two girls. One girl stops with a high school education and starts working right away. The other girl proceeds to a four-year college. This girl will earn a 60% higher annual salary than her friend. So the rate of return is 60%, which is quite startling. But in the case of men it is only 20%, so I tell my male students that they don't have to come to university, I want to have girls because that is more sensible from the economic point of view. [Laughter] But anyway, apart from that, I asked the question, "Why?" A lot of Americans, a lot of foreigners tend to believe that the Japanese woman's status is very low. Which is true, depending on how you look at it. But differences in hourly wages for those below age 30 are shrinking dramatically. Back in 1950 the difference was 1 to 0.7. Now it is 1 to 0.86. It's been steadily narrowing between men and women. Why has this happened?

The reason is that more women are getting hired. The difference in starting pay between men and women is not so great. About the same. But those women who go on to get higher wages don't want to get married. Because they don't want to get married, they accumulate seniority and get even higher wages. Because they get more pay they still don't want to get married.

In other words, because they don't want to get married, they gain seniority, and because of this they get higher wages. This leads, in turn, to substantial economic autonomy, so they have even less compunction to get married.

Co-residence with parents

I did a survey last year on what are the important factors on the part of women in choosing their prospective mates. I did a similar survey back in 1988. In 1988 I didn't include this category, but personality is quite important. Almost 85% of the women surveyed thought that was quite important. The second most important was income. About 78% of the women said that was very important in choosing a marriage partner. And the third most important was occupation. About 75% of them said this was a factor. But what is most shocking was this. Between 1988 and 1996 the percentage of women who said potential co-residence with parents-in-law was a crucially important criteria for choosing their prospective mates rose dramatically. Well that is quite defensible. In Japan, about 75% of my students are either the eldest son or eldest daughter. And according to this analysis, the major determinant of co-residence is birth order. Because of Confucian teaching, if you are the oldest, you have to live with your parents. This has been changing, but it is still a basic, fundamental force that is in operation.

Previously there were lots of second and third sons, so women did not always confront the prospect of living with parents-in-law. But these days nearly all the boys are the oldest. I mean there are no other sons. So, if a woman is also the only daughter or the eldest daughter, they have to look after both sets of parents. So naturally co-residence has become a very important factor in choosing a prospective mate.

The probability of co-residing with parents at the time of marriage is settling. Back in 1965 about 62% of marriages led to co-residence with parents immediately after marriage. But the rate has been falling, falling, falling. Yet even now, more than 30% of newly married couples live with parents.

Another factor which is affecting the marriage market is the proportion of marriages which are arranged. Arranged marriages are falling. Back in 1955 there was a sort of social force that dictated that men and women of certain age had to get married, often through arranged marriages. But this phenomenon has been falling quite rapidly. It used to be that 63% of marriages were arranged, but now it is less than 10%.

So social binding is gone. It is more like a free market. People can choose their prospective mates in the "marriage market."

When to have children

Another major change over the past few decades is the interval between marriage and birth of the first child. According to a 1984 PDR article written by Morgan, Brinks, and Parnell, Japanese people have a very short first birth interval. I think in 1965 about 16 months was the average interval between marriage and first birth. But recently it has been changing. At that time, according to them, Japanese couples wanted to have a kid ri ht away because Japanese women found the source of happiness in children. In other words, a woman's primary source of happiness was the children, rather than the husband, so women wanted to have kids right away. But in America the conjugal relationship is more important. That is why the birth interval in the United States is much longer. On average the interval between marriage and first birth is 24 to 26 months.

But now, the Japanese first birth interval is almost like America's. It has been changing, but this figure is quite tricky. There are more couples who are having children before marriage. In Japan marriage meant procreation. But this doesn't really hold anymore.

The average age of first marriage for Japanese women is 27.7 and that for men is 30.7. They are very high. They are some of the highest in the entire world. But, according to my 1996 analysis, the average age of first sexual contact for girls has been falling dramatically, so the period in which they are sexually active has been getting longer.

Even though the period of sexual activity is longer, I mean without getting married, co-habitation is very low. Compared to Sweden, the co-habitation rate in Japan is one-fortieth of the Swedish case.

Nobody can really explain what is happening. I mean I am having a hard time. I am trying to write a paper on that. Japanese singles lead a unique l festyle. They are sexually active, but they are not cohabiting, and the age of marriage is very high. And Japan is the only country in the world which has a rapidly increasing per capita income and a rising age of first marriage. And they tend to have a sort of reverse relationship. If the income is high, they should get married earlier, but that is not what is happening in Japan. There are so many contradictory phenomena going on in Japan, and I hope that Stanford people will look into this matter as one of their research topics.

And I am a bit worried about Japanese women because arranged marriages are gone; the marriage market is free, but according to my data in Japan 45% of single girls are not dating. I mean this figure has been stable since the beginning of the 1990s. The marriage market hasn't changed at all, and with arranged marriages gone, it looks like there is no way for Japanese girls to get married.

Japan used to have a universal marriage pattern, but this universal marriage concept is rapidly disappearing in my country.

A graying society

Back in 1950 the Japanese life expectancy for males was 56 years old, while in the U.S. it was 66 years old--a ten year difference.

But today, Japanese life expectancy is 76 years old, and the U.S. figure is 73. So over this 40-year period Japan and the U.S. crossed over somewhere. I think in 1960, if I remember correctly. And in the case of women, Japan's life expectancy is of course the highest in the entire world. Life expectancy hasn't been growing because of reduced infant mortality, which is already the lowest in the entire world: One child per thousand births.

The major source of the improvement in life expectancy comes from the prolonged survivorship of older people. Like the population aged 40 plus.

So that is good news for me. I can live a little longer, maybe it is bad news for my wife, but I don't know.


Anyway, because Japan has a low infant mortality rate, the number of births actually determine the shape of the population bell. In another 20 years, those who are 40 years old now will be retiring. They will be 60 years old. And those who were born last year will be 20 years old and they will be entering the labor market. And the way things are moving, we are going to have the severest population aging issues of any country in the next century.

I'll show you something. This is based on my population projection using a chronometric model, which is different from the one the government uses. I released this data to the public a few years ago, and I got a tremendous amount of criticism.

According to this, the population will peak in 2007 and it will start shrinking after that. And then I got called; I went to the Liberal Democratic Party to defend myself. How did I come up with this number, party officials asked, because the government expected the peak to occur in 2012 rather than 2007.

This has tremendous implications in terms of tax revenues. Right now the Japanese government has a huge deficit, and it wants to increase tax revenues, but if the population peaks much earlier than expected, then businesses won't invest so much, and if businesses don't invest, then revenues will decline.

So the government thinks that the psychological effect is enormous, and I was even called to the Diet to defend myself for two hours on how I came up with this number. I think this is ridiculous.

But anyway, last month the government made changes. According to its newest projection, the population will peak in 2007. Exactly the same year as I had projected three years ago. I am not bragging; it's probably a coincidence, but that is what happened.

Sometime this year or early next year, we are going to have more elderly persons than young kids, ages 0 to 14. And in 2007, 20% of Japan's population will be 65 and over, which will be the first such experience in the history of mankind. By that time Japan will have lots of problems.

In Japan, the level of aging varies considerably from region to region. And in one district, 47% of the population is 65 and over. I am now involved in formulating the fifth development plan for Japan. We have projected that by 2025, there will be communities where 87% of the population is 65 and over. Can you imagine 87% of the residents being older persons? There will be no tax revenues there. I mean this is a serious matter.

Today there are around 4,700 administrative offices and branches around the country, and I think most of them are going to have to be closed because depopulated areas will be all over the country. So one of the biggest issues that we on the Council on Natural Land Development face is what we should do with these ghost towns. It is a really big issue right now.

And also, there is the major problem of shifting the capital out of Tokyo to a northern region; I think we have to pick the place by October next year.

And then there is the issue of citizens who are 75 and over. Seventy-five and over is called the "old-old," and they often need nursing attention, medical care, and so on and so forth.

Right now it is not bad, they constitute about 40% of the elderly population. But in the next century, in the year 2018, the share is expected to be 48%. At that point, Japan will have the highest level. In other words, early in the next century, Japan will have a serious problem of caring for aged persons.

But do you know which age group is the one growing at the fastest rate?

Audience: Over 100?

Ogawa: Oh, good. Do you know the rate? My time deposit earns only 1.1% a year, but these centenarians are growing at an annual rate of 13%. Enormous, you know. I mean the fastest-growing segment of the population. When you reach age 100 you can get a silver cup from the prime minister. But if the current trend continues, it is going to be copper, and pretty soon wooden cups maybe. I mean, it is serious.

In fact I was really shocked two years ago to see this lady in a newspaper playing the shamisen. She was a geisha, and she was older than 100. I mean she is 100 years old. I don't know what she does, I mean, I've never heard of a 100-year-old geisha, but that really shows that Japan is an aging, graying society.

Oldest nation in the world

Let me summarize the basic features of Japan's aging population. In the year 2025, the proportion of those 65 and over will be highest in Japan, followed by Italy and Hong Kong, although Hong Kong will be disappearing. Among all the industrial nations, Japan will be the oldest in the entire world.

Although the United States will also be aging, in relative terms, the U.S. will be much younger than Japan. The reason is that the postwar baby boom lasted only two years in Japan, but in the U.S. there was a longer baby boom period, from 1947 to 1964. Seventeen years. Three versus 17 makes a lot of difference in the next century. Why does the E.U. need to be integrated? Because the E.U. countries are all aging. They have to revitalize their economies by uniting their countries.

Japan's 65 and over population is expected to move from 10% to 20% in 22 years time, but Germany and Sweden took 70 years and 65 years, respectively. It took them a long time to move from 10% to 20%, and they are having serious financial problems, particularly Sweden.

I couldn't believe it, you know, the Swedish fertility rate is almost as low as the Japanese fertility rate. Japanese total fertility rate is 1.42, which is the lowest ever in history, I mean for Japan. But Swedish fertility is falling like crazy. I couldn't believe it. Sweden, until two years ago, had one of the highest fertility rates in the entire industrialized world. But it's now close to the U.S. figure because of a depression. Poor economic performance leads to infertility.

The Swedes have pension problems and so forth, but they had 65 to 70 years to make all adjustments. But in the case of Japan, we had only 22 years. We cannot make any mistakes because the pace is so fast.

In the year 2007 Japan will be reaching the 20% level, becoming the first country to do so. Japan has been good at copying from other countries; we call it "adaptation," but people in other countries say "copying." But we can't copy foreign policies any more, since Japan will be first in terms of aging, and we will have to create our own policies.

So Japan's creativity will be tested after 2007. We have only ten years to go, so we have to really get to work to formulate policies which minimize the problems of population aging.

In the year 2025 females will outnumber males because of the difference in life expectancy, and we are going to have a lot of women, older women.

We might call it the feminization of the older population. Many of these women will be widows.

And it is currently my hunch that they will be living alone. Right now 14.7% of the elderly, 65 and older, are living alone in the case of women. But the share is going to go up to 23% in the years to come. In the U.S. it is about 40%, so compared to the U.S. it is nothing, but in the next century it is going to be at least slightly higher than half of the U.S. level, which is still a major revolution as far as Japan is concerned because Japan has had this three-generational co-residence custom. So that is a major change as far as Japanese society is concerned.

Women's growing care burden

And now, my question is, "Who is really going to look after elderly persons?" When this question was posed to married couples, 85% of the husbands said, "Spouse, wife." But do they know that one out of two Japanese wives have thought about divorce. And then I calculated when divorces increase, and I wondered how I can find out if my wife has started thinking about divorce or not?


Anyway, I wrote to a friend in Britain and we came up with something interesting. It is a very complicated diametric analysis, but the result is simple. If a full-time housewife takes on full-time employment, the risk of divorce goes up like crazy and is statistically very strong. If she shifts from being a full-time housewife to doing a part-time position, nothing. Nothing that great.

So I told my friend, "If your wife wants to work then you should ask this way. 'Do you want to work part-time or full-time?' If she says 'part-time.' No problem. But if it is full-time, forget it, you are in danger--in a crisis."


Labor force participation by women aged 40 to 64 isn't that spectacular. But the rise has been phenomenal. And according to some, the rise for this age group is the fastest ever recorded in an industrialized nation.

So the level is not that high, but the pace of the rise is very fast. It is connected with divorce, that is my basic idea.

Divorce does not carry much social stigma anymore. It is sort of a trendy thing. And by the end of my talk you will find out that divorces in Japan will be increasing in the years to come because demand for female labor will be increasing in this aging society.

As I said earlier, the demographic shift is enormous in Japan, and natural caregiving capacity is going down very rapidly in various parts of Japan. Despite this fact, the government started a program called the Golden Plan in 1990, which promotes in-home care.

I did a projection. The Japanese family's support capacity will go down by 50% in 10 years' time, and this is something I can predict with high accuracy. The reason is the numbers going to the numerator and denominator are all already born. They are there already. So what I can say for sure is that the Japanese family's care capacity will go down 50%.

In the year 2005, which is close to the year 2007, Japan's family care capacity will be the lowest in the entire world. The U.S. is pretty high. Again this is connected with the duration of the baby boom. And also the U.S. allows foreign workers to come in. That is another factor.

The Japanese government is trying to promote in-home care through the Golden Plan. Daycare centers and facilities for short term stays are being increased, and more health workers are being enlisted. But the key is having somebody live with elderly persons.

Co-residency is the key. And in the case of Japan, the proportion of the 65-and-older group living in institutions is only 1.6 percent, but in the case of the U.S. it is 5%, Germany is 4%, Sweden 9%. Many Japanese elderly persons living in institutions, moreover, are in the hospital. We call this phenomenon "social hospitalization."

Japan has a universal health insurance system. If I get sick I go to the hospital and I get hospitalized. I don't have to pay much. I pay only 10% of the medical bill and the rest is paid by the government. Because of this, do you know how long Japanese people stay in the hospital once they are hospitalized? An average of 45 days, as opposed to 10 days in the United States. Does this mean the Japanese people are four-and-a-half times as sick as Americans? No. We go to the hospital because we don't have to pay that much. Also, we lack the intermediate nursing institutions; geriatric hospitals are quite a new development, so all these elderly persons wind up in the hospital.

And if we put our parents in a hospital, we don't feel so bad. If we don't take care of them, it is a big social stigma. So in most cases we put ourpa rents in a hospital so we don't feel so bad.

But the government can't really cope with rising medical costs, so it decided, you know, to reduce costs through the implementation of the Golden Plan. But the key is co-residence. Can we really retain a high level of co-residence?

End of Japan's high savings rate

According to the 1978 White Paper on Health and Welfare, Japan had a high percentage of elderly persons who are residing with children compared with other industrial countries like France, the U.K., Finland, the United States, and Sweden. The incidence of co-residence in Japan is falling, b t it is still high. So the government is trying to take advantage of this. That is why it implemented the Golden Plan.

Japan is only one-twenty-fifth the size of the United States, but the total value of Japanese land is four times the total U.S. land value. This means that Japanese land prices are enormous. I mean outrageous.

So we can't afford to buy a house, and thus parents have a strong bargaining position. They say, "We'll give you the house in return for co-residence," which is a strategic motive. The parents provide stock, and the kids provide a service in a stock-flow contract. Because of this arrangement, Japan managed to maintain high rates of savings. It is called the dynasty model, where there is a transfer from one generation to another so that total savings don't go down. But will this pattern endure in the years to come?

The crucial factor is what happens to co-residency. In putting a paper together with Andy Meisen, I've found that the dynasty model definitely works. Depending on how much they receive from parents, kids display very different consumption patterns.

The main determinant of co-residency, as I said earlier, is birth order. If you are the eldest son, you have to live with your parents. Arranged marriages are another factor. Parents used arranged marriages as a mea s of controlling the flow of resources between generations. A criteria for an acceptable bride may be her willingness to live with her aging in-laws. There's a kind of control there. Education is yet another factor. Well-educated parents tend to prefer not to live with the kids. Because more people are receiving higher education, it looks like the incidence of co-residence will be declining in the years to come.

If that is the case, savings in Japan could go down further, and in fact the government has recently published a document encouraging elder people to start thinking about the "reverse mortgage scheme."

One Japanese city has a unique system whereby a resident can make arrangements to transfer ownership of a house to the city, which then becomes responsible for providing care and meals for as long as the resident if alive.

The interesting, or the scary, part of this, though, is that the kids don't always know about it. Parents make a deal with the city, but the kids aren't necessarily informed or consulted about this. All these kids assume that they'll get the land and the house. But when their parents pass away, there's no more land. The city keeps the land. The city keeps the house.

This kind of thing is going on, and in fact the government is officially encouraging elderly people to look into this. If that is the case, Japanese savings might be affected considerably in the years to come.

Changing family organization

Co-residing with the husband's parents, which is called patrilocality, is still dominant. But matrilocality, or co-residing with the wife's parents, is growing two-and-half times more rapidly. And my guess is that if the current trend continues, by the year 2000 co-residence with the wife's parents will be greater.

This would represent a major change in the Japanese family organization. In the past, co-residence invariably meant living with the husband's parents, and so this would be a major change.

The government is trying to use co-residence as a way of overcoming the problem of population aging, but as I have just said, co-residence will probably go down further.

I did a survey quite recently and asked women whether they had ever thought about dissolving the co-residence arrangement. And amazingly, 55% of the respondents said they had. In the case of men it was only 25%. Men don't live together with the parents all day. They are just home at night. But women have to spend the whole day with their mothers-in-law. So the in-law problem is very serious in Japan and, of course, the old lady is the supervisor and the young wife is the subordinate, so naturally they have frictional problems. And I think that this means, if there is a job outside, most likely Japanese women will use it as an excuse to not live with their in-laws.

There is one good thing about living with the wife's parents. The divorce risk is 20% lower than if the co-residency is with the husband's parents. The wife obviously can get along better with her own parents, so I think it is better to live with the wife's parents if couples have to live with parents at all. And then I don't think marriage will be such a big gamble for women.

Living together with parents can mean that the parents will help provide childcare services, allowing women to pursue their careers. But at the same time she might end up having to look after her parents or in-laws when they get sick, develop senile dementia, or become bed-ridden. So it is a gamble. But I can compute the cost of co-residence in this way. Suppose a couple has one kid, one birth. How much will the child cost in terms of hourly wages? If they have one baby, a woman's earning capacity goes down by 10%, but if she has to stay at home and look after elderly parents, she loses 1.2% per month.

You think this 1.2% is nothing, but on the average women spend 10 months looking after elderly persons, I mean, once they get sick. So they lose 12%. So in the case of childbearing, 10%, in the case of caring for a parent, it is 12%. So they are equally damaging for women. A public support system has to be introduced as quickly as possible because there are all these women having to provide care. This usually results in a conflict between a career and caregiving.

The burden of supporting an aging society

Despite these indications of weakening family support the government is trying to shift the responsibility back to families. This is because the total of health insurance contributions, pension contributions, social security contributions, and tax payments--the so-called national burden rate--will be 45% of national income in the years to come. According to my estimation, we will reach the 45% level in the year 2005, which is less than 10 years away. And we will reach 50% in 2014.

My conclusions are quite comparable to the ones obtained by the Ministry of International Trade and Industry and the Economic Planning Agency. They have their own econometric models, and we all came up with the same conclusions

An IMF study says that in 2010, the Japanese pension scheme will go bankrupt. This means we have to revise our social security system quickly.

And besides that, economic growth performance will be affected by the fact that the labor force will begin shrinking in the year 2001. The hours worked will be less and less, and so more women will have to be come i to the labor market. But again this is not really possible.

As I said earlier, women will be expected to perform many more tasks for the family. The number of elderly persons, bed-ridden persons aged 65 and over will go up like crazy. Almost like three times in the next 35 years.

I have calculated the burden of providing care to these frail, elderly persons. I mean the burden for women in various age groups. And the most astonishing figure is the rise in the burden of providing care to the elderly for those aged 40-49. Right now one out of fifteen women in their forties provide care at home. But in the year 2025 the share is going to be 46%. Sixty-four percent of women will have to provide care at home for elderly persons who are suffering from senile dementia or are bedridden.

And the problem is this. Those who will be 40 years old in 2025 are the ones going to elementary school today. Can we really count on them?

The percentage of women of reproductive age who expect their children to care for them in old age is going down. In 1950, about two-thirds of women hoped to depend on their children in old age, but this figure has been going down continuously. It really dropped dramatically right after a system of social security was implemented.

In a survey, women of reproductive age were asked, "What do you think about looking after your elderly parents?" For many years a high percentage said it was a good custom or that it was one's natural duty. Almost 80%. But starting from 1986 it dropped dramatically. And it is still falling.

I had a hard time publishing this paper; the reviewers said, "Why did it start falling?" My guess was this. Around 1985 the government started publishing a lot about population aging. In 1986 the government came up with a document saying, in effect, "Look, don't expect the government to provide you with financial assistance. You take care of yourself." And in 1987 they said, "Don't expect anything from us in terms of manpower. You take care of yourself."

Before then, women thought, "Oh, maybe the government will look after my parents. No problem." So they always said, "Oh, it is a good custom. But I don't have to take care of them myself."

But when reality sunk in, they started showing their real feelings. The percentage is still falling. In 1986 less than half of the women surveyed thought that it was a good custom or a natural duty.

So the Confucian notion of filial piety is deteriorating very quickly. This is going to affect the pattern of providing care in our country.

I have been talking about a lot of negative things about my country, and you might get me wrong and think, "Maybe this guy doesn't have any positive or constructive ideas about population aging." But I do. In the year 2000 the proportion of those 65 and over will be 17%, which is equivalent to the current Swedish level.

So in the year 2000, I will ask everybody to stand in a line from the youngest to the oldest. And I will look at the oldest 17% and call them "elderly persons." I will do the same thing every year. So in other words in order to keep the economic burden of the "elderly population" constant at the 17% level, I can change the definition of an elderly person. So in the year 2025 the elderly will be anyone who is 73.2 years old or over.

So in 2025, if the ranks of the elderly begin at 73.2 years old, then we might be able to manage the problems of population aging.

But I forgot to tell you one thing. I said America has a relatively young population. Japan and the U.S. have serious trade friction problems, but officials pay attention only to short term figures. But I think they should keep population trends in mind when they negotiate all these problems. My feeling is that the dollar, which is now 122 yen, could go as high as 200 in the years to come.

(The above article is offered for reference purposes and does not necessarily represent the policy or views of the Japanese Government)

Naohiro Ogawa

Born in 1944. Received his Ph.D. in economics from the University of Hawaii. Has been Population Officer at the U.N. Economic and Social Council for Asia and the Pacific. Is now professor of economics at Nihon University. Author of The Family, the Market, and the State in Ageing Societies (with John F. Ermisch), Fertility Change in Contemporary Japan (with Robert W. Hodge) and other books in English and Japanese.