birth rate around this time There turned out to be no such increase however. The reason is that, during the approximate period from 1995 to 2005 and in the few years after the outbreak of the global financial crisis in 2008, young people of this generation were not able to find stable employment due to the so-called employment ice age, which led them to think twice about marriage and having children. ,0 Put differently, had QQe been introduced at an earlier stage, second-generation baby boomers would not have had to cope with the repercussions of the employment ice age, likely resulting in an increase in th number of live births from around 1995 Improvement in Government Finances An improvement in employment means that incomes increase. Firms hire people because their profits are rising. When employment grows, both profits and wages increase. When there is an increase in profits and wages--that is, the income of the country as a whole the government's tax revenue also rises. Chart 5 shows the general government fiscal balance(relative to GDP)and government debt(also relative to GDP). While Japans fiscal situation is severe, its deficit in fiscal 2017 shrank to 2.7 percent of GDP. Compared with a deficit of 8.3 percent in fiscal 2012, this is an improvement of about 5.5 percentage point The reason is that the economy has been doing well and the governments tax revenue has been increasing. The increase in tax revenue due to the consumption tax hike from 5 to 8 percent is said to amount to about 8 trillion yen(1.5 percent of GDP). while the remaining improvement of 4.0 percentage points is partly attributable to the effects of a positive turnaround in overseas economies, it owes in large part to the improvement in the economy 5 For details on the employment ice age, see Genda Yuji et al, Shiishoku hyogaki sedai no keizai shakai e no eikyo to taisaku ni kansuru kenkyii iinkai hokokusho, Research Institute for Advancement of Living Standards, November 2016 6 In his recent book, former Bank of Japan Governor Shirakawa argues that the immediate respo of many major Japanese firms to the large demand shock brought about by the bursting of the bubble and the outbreak of the global financial crisis in 2008 was to reduce graduate recruitment and increase non-regular employment. During this so-called employment ice age, the young bore the brunt of the employment adjustment. University graduates entering the labor market during this time the so-called second-generation baby boomers- found it difficult to accumulate sufficient skill as young workers, leading to lower income levels, which in turn has had a lasting social impact including an increase in the rate of those who are unmarried and the consequent decrease in the number of births(available only in Japanese). Shirakawa Masaaki, Chio ginko (Tokyo: Toyo Keizai, 2018),p.1127 birth rate around this time. There turned out to be no such increase, however. The reason is that, during the approximate period from 1995 to 2005 and in the few years after the outbreak of the global financial crisis in 2008, young people of this generation were not able to find stable employment due to the so-called employment ice age, which led them to think twice about marriage and having children. 5 , 6 Put differently, had QQE been introduced at an earlier stage, second-generation baby boomers would not have had to cope with the repercussions of the employment ice age, likely resulting in an increase in the number of live births from around 1995. Improvement in Government Finances An improvement in employment means that incomes increase. Firms hire people because their profits are rising. When employment grows, both profits and wages increase. When there is an increase in profits and wages -- that is, the income of the country as a whole -- the government's tax revenue also rises. Chart 5 shows the general government fiscal balance (relative to GDP) and government debt (also relative to GDP). While Japan's fiscal situation is severe, its deficit in fiscal 2017 shrank to 2.7 percent of GDP. Compared with a deficit of 8.3 percent in fiscal 2012, this is an improvement of about 5.5 percentage points. The reason is that the economy has been doing well and the government's tax revenue has been increasing. The increase in tax revenue due to the consumption tax hike from 5 to 8 percent is said to amount to about 8 trillion yen (1.5 percent of GDP). While the remaining improvement of 4.0 percentage points is partly attributable to the effects of a positive turnaround in overseas economies, it owes in large part to the improvement in the economy 5 For details on the employment ice age, see Genda Yuji et. al, Shūshoku hyōgaki sedai no keizai shakai e no eikyō to taisaku ni kansuru kenkyū iinkai hōkokusho, Research Institute for Advancement of Living Standards, November 2016. 6 In his recent book, former Bank of Japan Governor Shirakawa argues that the immediate response of many major Japanese firms to the large demand shock brought about by the bursting of the bubble and the outbreak of the global financial crisis in 2008 was to reduce graduate recruitment and increase non-regular employment. During this so-called employment ice age, the young bore the brunt of the employment adjustment. University graduates entering the labor market during this time -- the so-called second-generation baby boomers -- found it difficult to accumulate sufficient skills as young workers, leading to lower income levels, which in turn has had a lasting social impact including an increase in the rate of those who are unmarried and the consequent decrease in the number of births (available only in Japanese). Shirakawa Masaaki, Chūō Ginkō (Tokyo: Toyo Keizai, 2018), p. 112