A new look at Japan's most daunting challenge: Population decline

By Matthew Linley, Designated Professor at Nagoya University. Matthew holds an LLM from Nagoya University and a PhD from the ANU.

On Tuesday the Japanese Government released its annual population estimate.

Unsurprisingly, the population declined for the third year in a row, by 0.17%. The figure grabbing the greatest attention, however, is 25.1%. That's the percentage of the population over 65 years old. Not unexpected, of course, but crossing that one-in-four threshold does resonate.

Let's take a brief look at some of the data and consider some implications. As Figure 1 shows, the number of Japanese aged 30 and over overshadows those under 30. Those born five or six years after the end of World War II (the 64 and 65 year olds) make up the single largest age group. Another large cohort of people born in the early 1970s is now in their late 30s and early 40s.

Figure 1: Number of people by age in Japan, 2014.

While Japan's aging population is a familiar problem, less is said about the differences between regions. Of Japan's 47 prefectures, only 8 experienced a rise in inhabitants over the past year. Figure 2 shows the top ten growth rates by prefecture. [fold]

Figure 2: Change in population by prefecture (top ten growth rates), 2014.

It is clear the demographic shift from rural to urban areas that began in the 19th century endures. Tokyo, despite its already enormous size, saw growth of over 0.5% while the adjoining prefectures of Saitama and Kanagawa, where many Tokyo workers live, were also boosted. The populations of Aichi (where Nagoya is located and home to Toyota) and Fukuoka expanded too. Chiba, just outside Tokyo, and Osaka made the top ten of growth rates but, showing just how dire things are, actually saw a reduction in residents.

What is salient about the current report is the pace of rural Japan's depopulation. Figure 3 shows the prefectures with the greatest rates of decline in the past year.

Figure 3: Change in population by prefecture (bottom ten growth rates), 2014.

Despite not being large to begin with, the populations of Akita and Aomori in northern Japan decreased by over 1%. These depopulation rates bring with them a host of problems for local governments that will be unlike those in urban areas. One cannot help but ponder the future of agriculture in Japan since Niigata, Fukushima, Aomori, Yamagata, and Akita are all top ten rice producers. Not only will young people subsidise their elders, but urban residents will need to provide greater support for sparsely populated rural areas as well.

Although the report notes that the number of foreigners living in Japan rose for the first time in five years, it is too bad that neither the government nor any major media outlets mentioned immigration. The government, businesses, and labour unions have deliberated over increasing the number of foreign workers required for the coming construction boom linked to the 2020 Tokyo Olympics. But nobody has advocated increasing long-term residents.

After acknowledging Japan's aging problem in his Davos speech this year, Shinzo Abe asked rhetorically, 'in such a country, where will you find those innovative and creative human resources?' He mentioned briefly how foreigners could provide 'help with housework' and 'care for the elderly' but his main argument was that more women must participate in the labour force.

But as others have argued, and as is confirmed by this report, putting faith in a single approach will not be sufficient to deal with the magnitude of the problem (the report also indicated that the female population decreased by 0.15%). Nor will it address the imbalanced nature of Japan's population decline. While improving childcare and educational facilities may make working in cities more attractive to women (men too), policymakers outside urban areas must not only provide these basic facilities but also revive local economies with fewer workers and consumers.

So, along with economic reforms and dealing with a rising China, this report is a good reminder of perhaps the most daunting set of questions that Japanese policymakers face today: what will the country do to stop its precipitous population decline and how does the rest of the country compete with the bright lights of Tokyo?