ABSTRACT
Japan’s aging and declining population poses enormous policy challenges while casting a cloud over the nation’s future prospects. One observer suggests that Japan is on demographic death row because the birthrate has remained low for so long (Magnus 2008, 35). This means that Japan has “locked in” certain future demographic realities that cannot be altered quickly by policy changes promoting an increased birth rate. While medical advances promise longer lives and a more active and healthy elderly, they don’t really offer a demographic soft landing. An expanding elderly cohort may to some degree become more productive, but there is no magic pill or technology that can ensure they will not become a growing burden on pension and medical care systems while the number of taxpayers supporting those programs is shrinking. However, policy reforms can mitigate the fiscal and economic implications of a graying Japan. Japan is one of the most rapidly aging societies in the world; from 1988 to 2007 the
number of Japan’s over 65s doubled. As of 2012, 24% of the population, numbering about 30 million, was over 65 years old and this was projected to reach 40% by 2055. Significantly, the number of workers supporting each retiree is shrinking from 10 in 1950 to 3.6 in 2000 and 1.9 by 2025, and there are fewer replacements in sight. According to the National Institute of Population and Social Security Research, by 2055 Japan’s population will shrink 30% to 90 million. The key elements of the demographic time bomb include Japanese women having
fewer children, the retirement of the 7 million-strong baby-boom cohort (1947-49), and people living longer. Adding to the prevailing sense of malaise, since 2007 Japan’s population is slowly declining. The combination of aging, low fertility and depopulation is creating a sense of urgency about the nation’s future (Coulmas 2007). The implications are enormous, ranging from pensions and elderly care to a shrinking labor force and domestic market, economic stagnation, fiscal deficits and social cohesion, but the situation is not catastrophic, despite alarmist assessments (Campbell 2009). This chapter examines the prospects of promoting women’s employment and increased immigration and whether such initiatives can help address the challenges of an aging society.
