September 7, 2012


Japan Shrinks : Many nations have aging populations, but none can quite match Japan. Its experience holds lessons for other countries as well as insights into the distinctiveness of Japanese society. (Nicholas Eberstadt, Spring 2012, Wilson Quarterly)

What will all of these unfolding demographic and familial changes mean for the Japan of 2040? A few of the most likely implications can be briefly itemized:

A looming old-age burden: Despite salutary trends in "healthy aging," Japan's extraordinary demographics can only mean that a rapidly growing share of the country's population will be frail in the years ahead--and that public pension allowances, health and medical services, and long-term care will be ever more pressing priorities for Japanese society. Not the least of the problems may concern Alzheimer's disease. A study commissioned by Alzheimer's Disease International suggests that, on current track, the prevalence of dementia in the Japanese population could rise to five percent by 2050--one person in 20. The caregiving implications of such an outcome are staggering--and given the coming erosion of the Japanese family, a steadily decreasing proportion of senior citizens will have children to turn to for support. Under such circumstances, an increase in long-term institutionalization among the elderly seems inescapable.

A new kind of childhood: In the recent past, children in Japan were plentiful, while elders (who could expect a measure of veneration) were scarce. But by most projections there will be three senior citizens in 2040 for every child under 15--an almost exact inversion of the ratio that existed as recently as 1975.

It is easy to imagine a Japan in which children--the country's link with its future--will become increasingly prized. It is also possible to envision a future in which Japanese boys and girls develop a pronounced sense of entitlement, much as China's rising generation of "little emperor" only-children have today, and regard their obligations and duties to their elders as increasingly onerous and optional. The hopes and expectations falling on this dwindling cadre of youth would be truly enormous--and for some fraction of the rising generation could amount to an unbearable pressure.

Japan is already witness to a worrisome rise in the number of what social scientists call NEET youth (not in education, employment, or training)--women and, more commonly, men who are, in effect, opting out of existing Japanese social arrangements. The pathological extreme of this phenomenon is the hikikomori--young adults who shut themselves off almost entirely by retreating into a friendless life of video games, the Internet, and manga (comics) in their parents' home. Hard data on the hikikomori are scarce, but Japanese experts guess that there are hundreds of thousands of them. Suffice it to say that childhood and young adulthood in the Japan of the future will be different--and in some ways, perhaps more difficult than ever before.

A struggle to maintain economic growth:In the aftermath of two "lost decades" of meager growth, a world economic crisis, and a devastating tsunami, the Japanese economy faces a future in which simply sustaining growth will be an increasing challenge. The working-age population is set to shrink by 30 percent over the next three decades, and even if older Japanese take up some of the slack, the country's work force will almost surely be much smaller than it is today. Extreme population aging, for its part, stands to place mounting downward pressure on the nation's savings rate--and thus, other things being equal, on investment.

Ballooning debt obligations will compound the demographic pressures on economic performance. Thanks in part to its approach to financing programs for the aged, Japan already has the highest ratio of gross public debt to gross domestic product (well over 200 percent) of the developed nations. Projections by researchers at the Bank for International Settlements imply that this ratio could rise to a mind-boggling 600 percent by 2040. (Greece's public debt, by contrast, amounted to about 130 percent of its GDP at the start of its current default drama.) While Japan might well be able to service such a mountain of debt without risk of sovereign default (assuming the country's low-interest-rate environment continues to hold), it is hard to see how a recipe for rapid or even moderate economic growth could be cooked up with these ingredients.

Even so, from a purely arithmetic standpoint, a country with a shrinking population--and even a shrinking GDP--could theoretically enjoy steady improvements in personal income and living standards. Japan does possess a number of options for enhancing economic growth. Significantly, it has built a generally strong educational system, and efforts to increase attainment (including implementation of a genuine lifelong approach to education and training) could tangibly increase labor productivity. Japan is also a world leader in research, development, and "knowledge production." Strengthening these capacities and applying technological advances and breakthroughs throughout the national economy could stimulate growth. And as the healthiest people on the planet, the Japanese have untapped possibilities for augmenting their future labor force by extending working life. Finally, far-reaching structural reform of the economy--long hobbled by a dysfunctional financial and banking sector and other ills--could significantly brighten the prospects for long-term growth. Seizing these opportunities, however, will require widespread determination to chart a sharp change of economic course on the part of Japan's political leadership and an aging electorate that may be increasingly risk-averse.

A less crowded, "greener" Japan: Japan's impending depopulation may have its upsides. With the emptying of the countryside, for example, the nation will have more living space and arable land per person than it does today. Given the country's ongoing improvements in energy efficiency and environmental technologies, depopulation could coincide with an improvement in natural amenities and (by at least some criteria) quality of life. Further, thanks to environment-friendly technological advances and, however unintended, slow economic growth, Japan may emerge as a world leader in reducing emissions of greenhouse gases.

Diminishing international influence: Demographic trends have created powerful pressures for a smaller Japanese role in world affairs in coming decades. The country's share of world economic output--and its international economic influence--should be expected to decline, perhaps considerably. Prospective trends in military-age manpower tell a similar story. Thirty years ago, Japan was the world's seventh most populous country. Thirty years hence it likely will be down to number 15, surpassed by Egypt and the Democratic Republic of the Congo, among others.
It is true that Japan's biggest neighbors, China and Russia, have demographic clouds on their horizons as well. And Japan's potential for self-defense is far greater than its current capacities (many of them shaped by self-imposed restrictions) suggest. Even if it becomes more assertive of its national interests, however, this maritime power, like others before it, may continue to rely heavily on international alliances to protect its national security. Japan may need international friends and allies in the years ahead even more than it does now. Japanese policymakers will be well advised to think about what their aging, depopulating nation can offer such prospective partners.

A potentially pivotal role for migration: Migration is something of a wild card in the country's future. In light of Japan's long-standing sensitivity to the "otherness" of gaijin (non-Japanese), immigration to Japan has been strikingly limited, assimilation of newcomers even more so. (To put the situation in perspective: In 2009 Japan naturalized barely a third as many new citizens as Switzerland, a country with a population only six percent the size of Japan's and a reputation of its own for standoffishness.) All the same, Japan is an increasingly cosmopolitan country, and the Japanese are enthusiastic tourists and international travelers. It is not impossible that attitudes toward the importation of foreign labor could change in the face of demographic pressures.
No less intriguing, however, is the proposition that Japan might turn out to be a major supplier of emigrants to the rest of the world. Given the cost and care outlook for their aging population, the Japanese might, for example, establish health care "colonies" in places such as India or the Philippines, spots where large populations of elderly Japanese could enjoy a good quality of life or receive necessary treatment and support at a fraction of what they would cost at home. Younger Japanese, for their part, might find it increasingly attractive to venture overseas in search of opportunity if the alternative were perceived to be a limited future in a shrinking, dying Japan. More than one million Japanese were already estimated to reside abroad as of 2009.

Posted by at September 7, 2012 4:47 AM

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