Demography and Growth - Japan on the Brink as Birth Rate Falls

The slowing birth rate in Japan poses a significant supply-side threat to the economic fortunes of a nation not renowned for it's ability to assimilate immigrants.

The decline in birth rate is precipitous, with a fall from over 2 million in the 1970s to fewer than 800,00 today. This means that there's going to be a dramatic decline in Japan's labour force in future and the question of funding an ageing population also represents a threat to future economic stability.

Background: Why is the Japanese population ageing?

The Japanese population is ageing for a number of reasons. One of the main reasons is that Japan has one of the lowest fertility rates in the world, which means that there are not enough children being born to replace the aging population. According to data from the World Bank, Japan's total fertility rate was 1.4 in 2020, which is well below the replacement level of 2.1.

Another reason for Japan's aging population is that the country has a high life expectancy. Japan has one of the highest life expectancies in the world, with an average life expectancy of 84 years in 2020. This means that more people are living longer, which contributes to an aging population.

Additionally, Japan has a relatively low rate of immigration, which means that the country is not receiving enough young people to offset the aging of the population. According to data from the Japanese government, the number of foreign residents in Japan was around 2.2 million in 2020, which is a relatively small percentage of the total population.

Furthermore, Japan has a long-standing tradition of valuing elderly people and taking care of them, and the family unit is still very important in Japanese culture. This has led to a large number of the elderly population that is still living in their own homes and not in assisted living facilities or nursing homes.

Finally, it is worth noting that Japan's population has been decreasing since the year 2007, and the country's population is projected to continue to decline in the coming years. This is due to a combination of low fertility rates and an aging population which results in a decline in the number of births, and an increase in the number of deaths.

Overall, Japan's population is ageing due to a combination of low fertility rates, high life expectancy, low immigration, cultural values, and demographic trends.