January 20th, 2014
04:10 PM ET

Is Japan's aging population a good thing?

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By Global Public Square staff

We were struck by some startling data this past week. Last year saw Japan's population fall by 244,000 people – the largest natural decline in that country's history. It's a trend that's getting worse. By 2060, Japan projects that its population will have fallen by a third; 40 percent of Japanese will be retirees. It sounds like a recipe for disaster. Imagine a United States where half the population is over the age of 65: Social Security would collapse, health care costs will explode.

So, we were surprised to see a headline in the latest edition of The New Scientist claiming "Japan's aging population could actually be good news."

How on earth is that possible? After all, China relaxed its "one-child" policy last month precisely so it could avoid the fate of Japan. And that fate, if you go by conventional wisdom, seems to be slowing growth, and leading to unsustainable debt. Why? Because our entire system is based on having enough young workers to pay for pensions and government services.

Well, according to The New Scientist, perhaps we've been looking at the wrong data. Consider growth – the number we tend to focus on the most. Look at the performance of a selection of rich countries in the last decade. According to HSBC, Japan’s economy expanded by just 0.8 percent a year, on average. France was faster; the United States and Britain grew at twice Japan's pace.

Now look at growth per capita – growth per person. This is a number that gets less attention. The table is inverted. The U.S. and France are near the bottom, but Japan is at the top. This is because individual incomes are actually rising while the population is declining. It would follow that people are actually better off. Not bad for a country everyone seems to have written off.

Let's look at some other indicators. According to the demographer Nicholas Eberstadt, Japan is the healthiest country in the world. Now given that the average lifespan in Japan is 83 years – the highest in the world – you'd expect health care costs to dominate. And remember, Japan has universal health care. Again, you’d be wrong. Japan spends only 8 percent of its GDP on health care – half the percent the United States spends.

Now look at education. Eberstadt points out that in the very near future, for every Japanese newborn, Japan will also have a centenarian – a man or woman who is a hundred years old. It sounds like a science fiction movie, but the low percentage of children also means fewer school students, less money spent on education. And remember, Japan has a strong schooling system, and is a world leader in research and development.

How does Tokyo manage this? Is it a welfare state? Again, the answer is no. According to the OECD, a group of 34 rich nations, the average Japanese worker faced a tax burden of about 31 percent – four percentage points lower than the group's average.

The New Scientist essay lists a few other hidden benefits for Japan. A declining population means that there is more space and arable land for every Japanese citizen. Remember, Japan is a tiny country that packs in 127 million people. Fewer people could well translate into a higher quality of life as well.

These are fascinating points to consider because many other countries may soon encounter some of Japan's problems. China could grow old before it becomes rich. Europe's rich nations have fertility rates that are too low to replenish the population. If it weren't for immigration, America's population would start leveling off as well – but remember, the United States gains more than a million immigrants legally every year. Japan and Europe, on the other hand, have stricter immigration laws and are less welcoming to immigrants.

Sill, we don't think dwindling population is actually all good at all, as the article suggests. Young people mean energy, risk-taking, hard work, and of course, tax revenues. Tokyo needs to reform its benefits system, raise its retirement age, and encourage immigration. But the essay does show that Japan has many hidden benefits in its demographic predicament. Maybe that's why there have been no revolts or revolutions as the country has gone through twenty years of stagnation. And, maybe, there are lessons for other countries in that as well.

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Topics: Japan • What in the World?

soundoff (35 Responses)
  1. ngu elvis

    Yes, is quite correct, those who have the greener future of an economy are the youth. so if a society is growing in its ageing population, then it is a bad sign for that society.

    January 21, 2014 at 6:19 pm | Reply
  2. j. von hettlingen

    Indeed, Ja pan is overcrowded. A smaller population will always be an advantage for nature and environment. The same for countries like India and Bangladesh. The latter is 2 1/2 smaller but with a slightly larger population than Ja pan.

    January 22, 2014 at 8:49 am | Reply
    • Dan

      I don't think you meant to write "India" there.

      January 23, 2014 at 3:12 pm | Reply
  3. Rats will continue to breed

    Rats will continue to breed themselves out of existence.

    Is the human race not more intelligent than rats?

    January 22, 2014 at 11:46 pm | Reply
    • sybaris

      and yet we still have rats

      January 23, 2014 at 10:32 am | Reply
    • JC

      "breed themselves out of existence"

      Species can breed themselves into overpopulation, followed by a sharp collapse of that overpopulation. How does a species "breed itself out of existence"?

      January 23, 2014 at 10:43 am | Reply
    • ed dugan

      Not as long as we have hispanics. They breed like rabbits and the amazing thing is that all of their children are born with their hands out, waiting for some welfare program to pick them up.

      January 23, 2014 at 1:37 pm | Reply
      • Lonnie

        Remove "hispanics", insert or add "Blacks" and you complete my image of you...

        January 23, 2014 at 3:33 pm |
      • juanmoretime

        I am a hispanic a veteran, college educated, married, with three sons, one a Marine veteran with a degree and the other two graduating this year. You sir represent what is worst in America and that is that you are a BIGOT and not a very educated or informed one. You choose to paint a whole group of people with the wide stroke of your biggoted mind. I served my country and being hispanic does not make me any less of an american and there are thousands like me. Besides biggotry, what have you brought to the table?

        January 23, 2014 at 6:38 pm |
      • ram

        How sad it must be to be so ignorant and in need of attention.

        January 23, 2014 at 9:39 pm |
      • Whovian33

        It's people like you that make me lose my faith in humanity. Sure, there are some hispanics like that. Just like there some redneck white trash Americans like that. Grow up! I'm 14 and even I know that that is a bunch of bull.

        September 29, 2014 at 12:07 pm |
  4. sybaris

    Articles like this indicate how the U.S. got to be a superpower by dumb luck (having plentiful natural resources) and geography (isolated from conflict) because, as indicated by it's dismal global ranking in K-12 education, it sure wasn't by the smarts of the people.

    January 23, 2014 at 8:21 am | Reply
    • julnor

      You left out the freedoms of our society, our free capitalist system and a system that allows people to succeed. We attract the best and brightest from around the world and we produce the best and brightest here. Not dumb luck.

      January 23, 2014 at 11:29 am | Reply
      • J-Pap

        Freedom? Tell that to slaves that built the US.

        January 23, 2014 at 1:03 pm |
    • Doug

      And yet in many areas, the US is an innovation leader. Obviously some of our success is dumb luck. However, in citing the higher test scores in other countries, people rarely stop to ask whether these other countries sacrifice anything in the pursuit of high test scores.

      For example, in South Korea, it is not uncommon for high school students to go to school for 15 hours a day during the week, and also attend Saturday schools. It is not surprising that such students would do better on standardized math tests. However, it is also fair to ask whether the US system has its own benefits; for example, could the US's success in research and innovation is in part due to unstructured time that students are afforded, or the lessened focus on rote learning?

      January 23, 2014 at 11:56 am | Reply
  5. No place for J-a-p-a-n

    There is no place for -J-a-p-a-n- in Western World.

    January 23, 2014 at 8:45 am | Reply
  6. Keith

    So, how are they going to continue to grow without enough workers?

    January 23, 2014 at 10:25 am | Reply
    • J-Pap

      Sounds like a good place for the youth of the world to find jobs in the coming years

      January 23, 2014 at 1:05 pm | Reply
      • nxpunk

        "Freedom? Tell that to slaves that built the US." ??

        Your comment is irrelavent. lol Slavery in the US is over bud.

        January 23, 2014 at 5:27 pm |
    • Jose Luna

      Robots.

      January 23, 2014 at 4:45 pm | Reply
      • Keith

        That is a plan

        January 23, 2014 at 4:53 pm |
      • Josh O

        Robots don't pay taxes.

        April 27, 2014 at 3:47 am |
  7. ART

    Its a good thing, the older population may not be able to continue that barbaric slaughter of Whales and Dolphins

    January 23, 2014 at 11:33 am | Reply
    • ram

      I was just thinking that myself. Horrendous.

      January 23, 2014 at 9:45 pm | Reply
  8. chrissy

    How very very nice of some of you to keep your racist comments on one thread! Proving of course that you havent evolved much! And that ignorance does, indeed, seem to be bliss! May God forgive you!

    January 23, 2014 at 2:26 pm | Reply
  9. Jerry

    These "have babies or the country will fall apart" topics are always a bit disturbing. Shouldn't an individual be first and foremost FREE?

    There's just some weird sense that people should have kids which MUST advance the interests of their parents or even their nation-state, like some kind of indentured servant.

    January 23, 2014 at 4:04 pm | Reply
    • 12is3times4

      Exactly. Then again, "live and let live" is only half of what it means to value freedom. The other half, "let the chips fall where they may", is the sticking point for lefties and righties alike. Hence the quasi-fascist indentured-servant mentality of which you speak.

      January 23, 2014 at 5:37 pm | Reply
  10. sixthromeo

    The aging population is NOT quitting employment, they are NOT retiring. Unemployment increases for the young while the aged hold on to their jobs; this is how it is ALL over the world. The "baby boomers" didn't create an exodus from employment, they are holding onto their jobs and their money and they are falling over dead before they retire.

    January 23, 2014 at 6:42 pm | Reply
    • ram

      Well, if Social Security benefits keep being held off longer and longer people have to work longer to survive...USA anyway.

      January 23, 2014 at 9:46 pm | Reply
  11. Dino

    "Because our entire system is based on having enough young workers to pay for pensions and government services."

    So its ok for the government to run a Ponzi scheme but illegal when Madoff does it?

    January 23, 2014 at 9:23 pm | Reply
    • ram

      Oh seriously. Give it a rest.

      January 23, 2014 at 9:46 pm | Reply

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