Demographic change in Japan
Social & Economic Implications of Shrinking Societies:
The Case of Japan
WDA Expert Symposium, Switzerland, May 23-25, 2012.
What are the arising challenges and how can they be tackled?
- What does population ageing and decline mean for Japan’s society, its labor markets, its competiveness & productivity, its financial markets and its public budget etc.?
- What are Japan’s recipes to cope with its unprecedented demographic challenges?
- What lessons can be learned from Japan in Europe?
- How can Europe prepare itself as the next shrinking and ageing region?
Broadly speaking, all the developed economies will face demographic slow-downs and unprecedented population aging in the decades to come, but Japan stands to be the most heavily burdened by these upcoming trends. It has had the steepest and longest fertility decline in modern history which started already in 1950.
In 2008, the country recorded around 40 % as many births as it had 60 years earlier. Japanese childbearing is currently estimated to be nearly 35 % below replacement level. But Japan has also enjoyed rapid and continuing improvement in public health since the end of World War II resulting in the highest life expectancy in the world.
The Japanese have an average life expectancy of 83 years, higher than any other country in the world. Taken together, the country’s fertility, migration and mortality trends are propelling Japan into a demographic decline never yet encountered in mankind’s history.
According United Nations Population Statistics estimates, these demographic trends will drive Japan’s total population down from 127 million to 114 million by 2030.
The relative decline in the working-age population is projected to be even steeper, from 81 million to 67 million, or a 17 % decrease. At the same time, the number of Japanese senior citizens will rise – and by 2030, the country’s median age will be above 52 years, with 30 % of the total population 65 or older.
The economic implications of these impending changes are far from positive. Even with healthy aging and late retirement, these trends suggest a marked contraction in the country’s labor supply and wealth-creation potential. Moreover, the social and economic strains from Japan’s looming old-age boom could further complicate efforts to maintain even the country’s current sluggish rates of economic growth. Not least of all, these demographic changes also have important geopolitical implication in the region as well as Japan’s position in the global community.
Left unattended, the demographic trends in Japan (as well as the similar ones being encountered in Europe with slight delay) will strongly affect economic growth, private & public consumption, wealth as well as the sustainability of their social security systems designed and continuously upgraded in the 20th century.
The WDA-Expert Symposium “Social & Economic Implications of Shrinking Societies: ”The Case of Japan” will address these challenges and will explore how Japan has reacted so far to this challenge and what needs to be done in the future.
Any promising approach must focus on augmenting human capital by expanding education, improving health conditions and creating an environment in which greater returns can be generated by the fewer human resources. To succeed on this unprecedented journey means to, among others, also redesign work-life balances, societal social & solidarity contracts, pension funds, healthcare plans, public spending and migration policies.
Europe’s demographic position is still at a stage where it can proactively and successfully prepare for the continent’s future – and Japan is the showcase to learn from.
The areas of content of this expert symposium will therefore be:
- Future sustainable society contracts – what is the definition of solidarity in the 21st century?
- Labor market policy: retirement strategies, education and productivity, work-life balance
- Welfare and social security: pension reform, social care
- Migration policies
- Health policies: long-term care, health expenditures, the role of prevention
- Intergenerational issues (e.g. intergenerational solidarity)
- What is the role of innovation and potential most promising areas?
- What are the lessons for potentially shrinking societies in other countries?
- The lessons learned from this symposium will guide further research and teaching lead by the WDA Forum at the University of St. Gallen.
- Finally, this symposium will hopefully fuel public discussions how Switzerland will address and manage its future as a very prosperous country with an unique direct democracy surrounded by the European Union.
Pictures from the Expert Symposium.