Japan's Population Decline

11/14/07

Japan's population decline could have disastrous effects on the country as more adults enter their senior age and depend on the younger generation to take care of them. Japan has just recently experienced a decline but the expectation is that will continue until the end of the century. The poulation reached a peak of about 130 million in 2000 but should drop in half by 2100.

japanese population decline

With Japan’s labour force expected to decrease by 10% in the next 25 years, the economic outlook is far from bright. In all likelihood the domestic market will shrink, production will fall, the government’s revenue base will contract inexorably and it will struggle to meet welfare and medical payments for an increasing number of elderly as the dependency ratio (the number of workers supporting the elderly) will shift dramatically.

In 1950 one elderly person was supported by 12 members of the working population, by 1990 it was 5.5 workers, and by 2020 it is estimated to be 2.3 workers. Naturally the government is concerned about such a scenario.This leaves the question – how can Japan ease this predicted slide, maintain its population and therefore ensure economic security and continued prosperity? As Iyotani has shown, the rural population has all but been depleted and is no longer the viable supply source of labour it once was. Other alternatives too, have almost been exhausted. Making greater use of elderly or female workers, for example, is difficult as participation rates (especially among part-time workers) are already quite high (Tsuda, 2001). Similarly, greater automation has taken place in many industries and moving production offshore has its limitations. Consequently, the two most plausible possibilities are either by making more children or through increasing immigration. With relation to both of these, however, the Japanese government is precariously placed.

Government Trying to Increase Birth Rate of Children in Japan

The situation in Japan is fast becoming critical and proactive measures are needed urgently. In March 2002 Prime Minister Koizumi Junichiro, reinitiated debate on how to stem the downward trend of Japan’s birth-rate. The Health, Labor and Welfare Ministry set up an office named the ‘Anti-Low Birth Rate Measures Promotion Headquarters’ and has since created new policy measures aimed at curbing the decline. Before the policies on the table are examined, first it is useful to examine briefly some of the reasons for the falling birth-rate.

Although the Japanese are known to live longest, flu-related deaths amongst the elderly are on the rise.

The scenario of an aging population and a low birth rate has only recently been recognized by the authorities as creating a significant economic burden.

Simply put, it means there aren’t enough people being born to work and support the aged. More worryingly for Japan, the population is set to decline to about 100 million by 2050, down from about 128 million today.

This is not the kind of problem you can solve easily by churning out robots down an assembly line at a mile-long factory in Osaka, though, knowing Japanese inventors, someone is probably working on it as we speak.

Even with the prospect of immigration, the gap between the available economically active workforce and the numbers required to maintain the economy on the roll will not easily be bridged.

Rei Nagakura