Japan's Demographic Time Bomb

Japan eyes demographic time bomb - BBC 19 Nov 2007

In the first of a series on Japan's population crisis, the BBC's Philippa Fogarty looks at what the demographic changes mean for Asia's economic giant.
In Tokyo's Harajuku district, a steady stream of people are visiting the Meiji Shrine.

Parents with small children dressed in traditional kimono stand in front of the shrine, clap twice and then bow, before turning to pose for a group photograph.

This is shichi-go-san, when families with children aged seven, five and three visit shrines to pray for their health and long life.

It is a happy and colourful scene. But the celebrations also highlight an issue looming ever larger for Japanese society.

Tourists and photographers outnumber the family groups, most of which include only one child. In the gardens around the shrine, grey is as common a hair colour as black.

'National viability'

Japan is about to experience demographic change on an unprecedented scale.

The birth rate has been falling steeply for half a century. In the early 1970s it passed the replacement level of 2.1 births per woman and in 2005 hit a record low of 1.26.
That same year, the population began to shrink. Forecasters say that, based on current trends, it will fall more than 20% by 2050.

But the Japanese, already famed for their longevity, are also living longer. In 2006, the average life expectancy was 82.


Japan has the world's highest proportion of elderly people. More than 20% of the population are now over the age of 65. By 2050, that figure is expected to rise to about 40%.

In graph format, it resembles a top-heavy skyscraper ready to fall.


The changing shape of Japan's population
Across Japan, people know that this demographic shift constitutes an enormous challenge.

It is an issue that "will not only have an impact on economic, industrial and social security issues, but ... is intertwined with the very existence and viability of Japan as a country", the Policy Council for Declining Fertility wrote in a report last year.

Rural signs

So what are the implications for Japan?

Firstly, a low number of babies now points to a shortage of workers in the future. In 2000, two-thirds of Japan's population were between the ages of 15 and 64. By 2050, that figure will be around the 50% mark.


Country towns are feeling the impact of the population shift

That means that unless the government makes a U-turn on immigration or persuades more women and retirees back to work, companies will soon be struggling to fill jobs - bringing obvious economic implications.

Fewer workers also means fewer taxpayers and so less revenue for the government. But as the number of retirees goes up that same government will be facing increasing pension and healthcare costs.

How it meets these is an urgent question.

In the countryside, the effects of the demographic shift are already being felt. In many towns and villages, the proportion of old people is double the national average.

Young people are leaving for the cities and government funding is falling. Schools are closing, buses are running less often. In one rural town, an official said that if a new building went up, it was most likely an old people's home.

There are signs of change in the cities too. In northern Tokyo, the Sugamo shopping arcade has emerged as a playground for the elderly.

There are no burger bars, CD shops or coffee chains. Instead, small shops and stalls sell clothes, traditional food and health products all designed to appeal to pensioners - a reminder of their increasing power as a demographic.

Parents, on the other hand, are not being similarly accommodated. In some suburbs, one young mother said, it was easier to buy clothes for the latest must-have accessory - a little dog - than for a small child.

Front-runner role

Of course, the demographic changes have not come out of the blue. The trends have been obvious for many years.

Successive administrations have taken steps to boost the birth rate and introduce financial reforms to meet rising costs. But the problems remain.

In 2006, Japan's birth rate went up slightly - children of the baby boomers are now in their mid 30s - but has since resumed its downward trend. And in October, a government panel recommended reviewing social security payments to the elderly to guard against a possible system collapse.

These problems are not unique to Japan. South Korea and Taiwan both have lower birth rates, while the average across OECD countries is 1.6.

Italy, Greece and Germany have all been hard hit, while several Eastern European countries are facing population decline.

Dr Kuniko Inoguchi, former minister for gender equality and social affairs, says that Japan has a front-runner role on the issue.

"We have a pioneering role to play in streamlining policies to combat the declining population. Japan has such a big population that if we could come up with a solution, I think that we could help many other Asian countries to come up with their solutions."

"So I hope the world will pay attention to it and that should help our government to put a higher priority on it."