The Crisis of Japan’s Population

Japan is ageing, or in other words, Japan’s population is getting older. Its population is shrinking at a rapid pace.

Japan is being purported to have the greatest proportion of elderly citizens and is experiencing a “super-ageing” society in both rural and urban areas.

Reading the article from businessinsider, I found out that:

  • “While aging populations are presenting economic difficulties in much of the developed world, the problem in Japan is dire: The country’s birth rate last year dropped to its lowest level since statistics were kept in 1899.”
  • “The number of babies born in the country last year dropped to 946,060, and it’s the second year when new births remained below 1 million, Japan’s government said. It’s the lowest level since the country began counting in 1899.”
  • “At the same time, the number of deaths in the country — owing to the increasingly aging population— hit a postwar high of 1.3 million. That means Japan’s population fell by a whopping 394,373 people in 2017.”
  • “In the 1970s, Japanese women on average had 2.1 kids. Today that number is only 1.4 — far below the replacement rate, or the rate at which Japan would maintain its population.”
  • ” Senior citizens over the age of 65 make up more than a quarter of the population.”

From reading the article, it can be said that Japan is sinking into the crisis of ageing population quite seriously. Even though Japan has set a goal to increase the birth rate to 1.8 by 2025 and to maintain a population of about 100 million people by 2060, it’s easier said than be done.

CAUSES

One of the reasons behind this ageing population is the high life expectancy of the citizens in Japan. Japan’s life expectancy in 2016 was 85 years. Factors such as improved nutrition, advanced medical and pharmacological technologies reduced the prevalence of diseases, improving living conditions which increase the life expectancies.

[Japan’s birth and death rates since 1950. The drop in 1966 was due to it being a “hinoe uma” year which is viewed as ill-omened in the Japanese Zodiac.]

 

 

Another reason is Japan’s total fertility rate (the number of children born by each woman in her lifetime) has been below the replacement threshold of 2.1 since 1974 and reached a historic low of 1.26 in 2005. Experts believe that signs of a slight recovery reflect the expiration of a “tempo effect,” as fertility rates accommodate a major shift in the timing and number of children, rather than any positive change.

ECONOMIC EFFECTS

This ageing demographic trend means that the government needs to provide more pensions and funds for social-security since there are more elders to take care of in the country. It also means that there are less young people to take care of the elders and a shortage of young workers which leads to a slow-moving economic growth. 

On the left, is a graph of the real GDP growth rate in Japan from 1956 to 2008. As it can be seen, overall, the GDP dropped by a massive amount.

The Japanese labour market is already under pressure to meet demands for workers, with 125 jobs for every 100 job seekers at the end of 2015, as older generations retire and younger generations become smaller in quantity. Companies have been seeking to use technology to resolve this, such as robots with AI technology. Also, The government has focused on medical technologies such as regenerative medicines and cell therapy to recruit and retain more older population into the workforce.

My personal opinion is that Japan needs to design policies to increase birth rates and recruit people from different nations to help resolve the problem of the labour market. Otherwise, the economy of Japan with continue to go downhill. The shrinking population is having a major impact on Japan’s economy and society that will continue over a long-term period, while people tend to feel that its short-term effects are small and negligible, causing policies to come out too late. Therefore, to solve this, Japan needs to take actions before it’s too late.

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