November 13, 2004

PITCAIRN ISLAND II:

The incredible shrinking country (The Economist, Nov 11th 2004)

The projections vary, but most experts believe that Japan's population, now 127.6m and barely growing, will peak some time between next year and 2007, and then begin a long, steady slide that will last several decades at least. Japan's Institute of Population and Social Security Research (IPSS) forecasts that the population will fall to somewhere between 92m and 108m by mid-century, with a medium-case prediction of about 100m people in 2050. The United Nations foresees a slightly smaller drop over the period, but still to around 105m people.

Even though Japanese lifespans continue to lengthen, the country simply will not have enough young people to maintain its population. The fertility rate (the number of children per woman during her lifetime) fell below 1.3 last year, down from 3.65 in 1950. Although Japan's bureaucrats have launched a drive to promote childbirth—including tax breaks and rules helping parents take more leave—the fertility rate is expected to stay low for at least a few decades. By 2050 the proportion of children under 15 will fall to less than 11% of the population (see chart), from 16% in 1995. The average Japanese will then be over 53 years old, 12 years older than now.

This will affect everything from work and family life to foreign policy and national security. Japan will probably have to let more workers immigrate, though public unease will no doubt lead it to delay and minimise this shift as much as possible. A smaller population may also mean slower economic growth; that will take its toll on spending categories, like defence, whose clout depends more on total economic weight than on income per person.

One obvious consequence will be pressure on the social-insurance system, including health care and pensions, as the working-age population shrinks dramatically. The IPSS reckons that there will be 31m fewer Japanese between 15 and 64 years old in 2050, and that this group will shrink from two-thirds of the population now to just over half. The ruling Liberal Democratic Party lost ground in the elections for the upper house this summer, partly by forcing through benefit cuts and higher premiums on pensions. But more will have to follow. The speed of this demographic shift and Japan's high debt levels (the IMF says Japan's net public debt is around 80% of GDP) have led some to worry about a looming fiscal implosion.


Several years ago Ken Burns did a film on the Shakers, with interviews of the few remaining. Hopefully his cameras are running in the rest of he West.

Posted by Orrin Judd at November 13, 2004 8:45 AM
Comments

"Let a chicken or pig be born in Delhi or Shanghai and the bean counters at the U.N. and World Bank will tell you that the nation is wealthier. But let an Indian or Chinese mother give birth to a son or daughter, and it goes down in their crabbed little ledgers as a liability."

-- Julian Simon

(I think of this as a Julian Simon quote, but the only online attribution I could find cited a WSJ editorial. I assume it will surprise no one here that I decided to go with my memory rather than the evidence.)

Posted by: David Cohen at November 13, 2004 9:46 AM

"A smaller population may also mean slower economic growth; that will take its toll on spending categories, like defence, whose clout depends more on total economic weight than on income per person."

So Japan won't be able to field a million man army or put up a space shot. Small price to pay for not having millions of illegals running around not to mention the total destruction of their culture. The accumulated wealth and further productivity increases should be plenty to absorb shifting older demagraphic.

Even though you are mixing catastrophes with your Shaker reference, a much more sane approach would be to get the rest of the world to stop breeding like idiots. In the immortal words of the ggreat profit the reverend jesse jackson "let us liberalize and materialize not paralyze and terrorize". Ok, I made that up but if your solution is an arms race (literally), then it is doomed to fail in ways much more dangerous than trying to pay for a few retirees.


Posted by: Perry at November 13, 2004 10:12 AM

What wealth? What productivity?

Posted by: oj at November 13, 2004 10:15 AM

The second largest economy in the world. An increasing productivity as technology becomes even more pervasive. An end to the practice of letting workers go at 55 in order to make room for younger ones. The reality is that most people can work well past 65 at their current jobs with no serious loss of productivity. There is no shortage of septagenerian doctors, lawyers, CPAs, actuaries, computer people, etc who are just as good as they were at age 50.

Posted by: Bart at November 13, 2004 10:52 AM

It's always useful in arguments like this to look at the extremes, just to see if a state of affairs can continue indefinately, or must flip at some point. So, unless people want to argue that the last living Japanese person will live a rich, fulfilling life surrounded by his robots, including the defense 'bots guarding his boarders from the undermen, you have to agree that the Japanese might want to take some action now. As, in fact, they seem to believe.

Posted by: David Cohen at November 13, 2004 11:00 AM

Bart:

There's nothing more absurd than the notion that an increasingly aged majority will require itself to work harder.

Posted by: oj at November 13, 2004 12:42 PM

OJ,

I've seen too many superannuated people still at the top of their game in many different fields. An end to 'forced retirement' will be a net positive in Japan as the end of income restrictions on Social Security recipients has been a net boon to our economy.

Posted by: Bart at November 13, 2004 4:38 PM

Bart:

Feel free to list the instances of a majority imposing on itself to benefit a minority.

Posted by: oj at November 13, 2004 6:24 PM

David,


Yes, I think Asminov had it right and the point is quickly approaching when everyone will have anything they want at least by today's standard of living. One prime example is water, we give it away now for free. The only thing that will most likey fail this is too many people on the planet.

Will this future cause people to stop having kids totally? I personally don't think so, therefore, I donot agree that in your extreme senario, the part about the last Japanese standing will occur. We are talking about 110 million japanese as opposed to the current 127 million, hardly a population crash.

T advocate massive immigration and hyperbirth rate is not sane.


Posted by: Perry at November 14, 2004 10:59 AM
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