We first argue theoretically that labor force graying caused by younger workers shrinking and older workers growing leads to more employment of foreign workers. We then use Japan’s prefectural data to estimate that on average a 10 percent fall between 2010 and 2015 in the relative number of...

We first theoretically argue that labor force graying caused by younger workers shrinking and older workers growing lead to more acceptance of foreign workers. The empirical results from Japan's prefectural data support this theoretical prediction and suggest that on average a 10 percent fall...