TOKYO - Japan is projected to face a labor shortage equivalent to 3.84 million workers by 2035, translating to 17.75 million hours of unfilled labor daily, local media reported.

Despite an expected increase in the overall workforce, the labor shortage is forecasted to expand by 1.85 times compared to 2023 driven by a reduction in individual working hours due to work-style reforms and other measures aimed at improving work-life balance, Jiji Press cited a report by Persol Research and Consulting Co and Chuo University.

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The workforce is expected to rise from 67.47 million in 2023 to 71.22 million in 2035, with more women, elderly workers, and foreign nationals entering the labor market.

The number of foreign workers is projected to grow significantly, from 2.05 million to 3.77 million.

However, average annual working hours per person are expected to decline by 8.8 percent by 2035, largely due to an aging workforce and the implementation of work-style reforms.

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To mitigate the labor shortage, the report highlighted the need for reforms, including adjusting tax and social security systems to prevent reduced working hours, encouraging side jobs, and boosting productivity, particularly through the integration of generative artificial intelligence.