Officials published targets on work-life balance for the first time
Japan's working population will shrink by more than a third by 2050, according to an annual government report.
The country currently has 66m people in work, but officials say the figure will slump to 42m in coming decades.
The report blames the fall on declining birth rates and an ageing population, but it also highlights a failure to get women and elderly people into work.
The document says allowances and benefits should be improved to make it easier for workers to raise children.
The Tokyo government publishes its assessment of future trends in the labour force every year.
This year the report expresses concern that those in employment in the middle of the century will have to work harder and longer, as there will be fewer of them.
So this year's report for the first time includes targets to try to help emphasise a healthy work-life balance.
Akira Imai, a senior official responsible for tackling declining birthrates, said the report marked a change in the government's attitude.
"The government had previously left the task of promoting a better work-life balance to individual companies, but we determined that society as a whole needs to tackle the issue."
One out of every 10 Japanese employees works more than 60 hours a week. The government says it wants to halve that, although it does not say much about how this will be achieved.
To help address the low birth rate, it wants more male workers to take childcare leave.
And it says Japan should urgently build a framework of family allowances and other benefits to make it easier for workers to marry, to have children and to raise them properly.