Mumbai: The average age of the global population is declining, yet in nations like Japan, the trend is quite the opposite. Japan’s population is ageing rapidly, with more than 40 per cent projected to be over the age of 65 by 2050. This demographic shift, common in advanced economies like China, Singapore, and many European countries, poses significant challenges for Japan’s future.
Japan’s Ageing Population Crisis
Currently, over 29 per cent of Japan’s population is aged 65 or older, a sharp increase from 17.3 per cent in 2000. By 2100, this figure is expected to rise to 41.2 per cent. Simultaneously, Japan’s birth rate has declined dramatically, falling from 9.5 births per 1,000 women to 6.5 births per 1,000 women. The shrinking working-age population, which dropped from 67.1 per cent in 2000 to 59.4 per cent in 2022, highlights the urgency of the issue. If left unaddressed, this decline could have profound impacts on Japan’s economy and workforce.
Causes of the Demographic Shift
Several factors contribute to Japan’s shrinking population. The rising cost of living is a significant deterrent to starting families. Housing, education, and healthcare expenses have surged, making family life more challenging. While 77 per cent of people aged 15 to 64 are employed, many workers in Japan endure longer working hours than their counterparts in other OECD countries. Despite these efforts, wage growth remains insufficient to encourage family expansion.
Additionally, Japan’s evolving lifestyle has led to a cultural shift. In earlier decades, marriage and family were prioritised, with men typically becoming the primary breadwinners while women managed households. However, modern Japanese couples are increasingly delaying marriage and focusing on their careers. The marriage rate has plummeted from 10 per 1,000 people in 1970 to 4.1 per 1,000 people in 2022, contributing to the country’s declining birth rate.
Consequences of Japan’s Population Decline
One of the most significant consequences of Japan’s ageing population is the anticipated decline in GDP. As the working-age population shrinks, maintaining economic productivity will become increasingly difficult. While the government has considered raising the retirement age to 70 or 75 to keep more people in the workforce, such measures alone may not offset the diminishing working population.
The declining workforce is also leading to severe labour shortages in critical sectors such as healthcare, education, and public services. Younger generations are increasingly opting for careers in the corporate sector or family-owned businesses, further exacerbating shortages in public services like teaching and caregiving.
Measures to Address Japan’s Ageing Population
To combat the declining birth rate, Prime Minister Fumio Kishida’s administration introduced the ‘Direction on Strategy for Children’s Future’ in June 2023. This comprehensive plan focuses on addressing the financial burdens that deter young couples from starting families. Among the proposed measures are child allowances and subsidies for childbirth and education. Additionally, workplace reforms and the expansion of childcare facilities are aimed at providing more support for working parents.
The government has pledged to invest approximately 3 trillion yen (US$20 billion) over the next three years to implement these policies. However, this substantial investment could further strain Japan’s national debt, raising concerns about long-term economic stability.
Japan’s Population Vision 2100
In an effort to stabilise the population and strengthen the economy, a private panel of experts has developed a proposal known as the ‘Population Vision 2100’. This plan aims to maintain Japan’s population above 80 million by the end of the century. The panel recommends establishing a new government body dedicated to managing population-related strategies.
One key proposal is to attract skilled immigrants to mitigate the effects of the shrinking workforce. Japan has historically maintained strict immigration policies, but the demographic shift may prompt a reevaluation of this stance. Additionally, the panel emphasises the importance of improving economic productivity through enhanced human resource development, which could boost Japan’s economic competitiveness on the global stage.
Japan’s demographic crisis requires urgent and sustained action. While efforts are being made to reverse the declining birth rate and bolster the workforce, the long-term impact of these strategies remains uncertain. As Japan moves forward, addressing the financial and cultural barriers to family life, improving workplace environments, and considering immigration reform will be crucial in tackling the challenges posed by its ageing population.
Japan faces a demographic crisis as its population ages and birth rates fall. Explore the root causes of this shift and the government’s efforts to reverse the trend through strategic plans aimed at boosting the birth rate and addressing workforce shortages. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
