Transcript The Future of Japanese Society and the Vulnerabilities of

The Future of Japanese Society and the
Vulnerabilities of Population Decline
Michael Sutton, Ph.D.
College of International Relations
Ritsumeikan University,
Kyoto, Japan
4th International Conference on Population Geographies,
10th -13th July, 2007
The Chinese University of Hong Kong
In recent years, population decline is causing
anxiety in Japan.
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Japan is ageing and the birthrate is declining which will mean
a smaller labor force, pressures on aged care and less
economic growth.
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These trends are causing great anxiety in official and public
circles. Many believe that Japan has done something terribly
wrong to reach this stage and something or someone in Japan
needs to change in order to reverse these developments.
Everyone is trying to find a solution to ‘reverse’
the transition to an aged society
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The Japanese Government and bureaucracy strongly support
efforts to increase fertility and measures to encourage women
and elderly people to work.
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A critical alternative is that Japan needs substantial
immigration numbering in the millions as soon as possible.
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Both the Government and its critics see the cost of inaction as
causing irreversible injury to the Japanese economy and
national pride.
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But is there cause for alarm?
What do the statistics tell us about the crisis?
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The year 2006 marked the beginning of population decline.
One estimate is Japan will reach 100 million by 2050
Japanese fertility has already declined for 25 years.
The Japanese Labor force has already been declining since
1995 (87.17 million). It will reach 53.89 million by 2050
The elderly in Japan will reach 35.86 million in 2050
Due to longevity and fertility decline, Japan is the pioneer in
the demographic transition (UN, 2001)
If Japan is the pioneer, this suggests that the
‘crisis’ is not a crisis.
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The declining birthrate is not the result of unique, oldfashioned or special features in Japanese society and/or the
economy.
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Japan is the first to experience this part of the demographic
transition.
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Post-industrial societies will ALL experience the demographic
transition of an ageing population and declining birthrates.
What is the ‘demographic transition’?
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The demographic transition is a process that occurs in all
countries as a result of economic development, from high
fertility and mortality to low fertility and longer life
expectancy (UN, 2006).
In this model, there are two stages which are vital: the slowing
of the birthrate to manage economic growth; and the transition
to an ageing society.
The first is essential to secure national prosperity, while the
second is a consequence of prosperity.
In the post-industrial society, long life expectancy, low infant
mortality and prosperity are aspects of life to be celebrated.
But why is everyone depressed?
The demographic transition is a ‘future-based’
model: Japan is the first
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Japan is the first to experience this stage of the demographic
transition due to increased life expectancy and declining
fertility.
The ageing society will put downward pressure on economic
growth and lead to higher burdens of care for the elderly.
The expert opinion (e.g. OECD, UN) suggest a comprehensive
revision of economic policy.
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But, an ageing society will not lead to disaster.
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The demographic transition is another adjustment for the
evolving modern society.
But, the Demographic Transition Model doesn’t
answer all the questions…
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For example, is there a point of critical vulnerability, a time
during which vital changes need to be made?
Are there periods during which certain policies (e.g.
immigration) will be more productive or even
counterproductive?
Unfortunately, the answers are ambiguous.
Countries could address short-term population vulnerabilities
e.g. pensions, and labor market inflexibility.
Countries could also establish priorities for addressing longterm population vulnerability such as social and economic
frameworks in an ageing society.
For example, the relationship between
demographic change and economic growth is
ambiguous
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The conventional wisdom (UN, OECD etc) is that during the
last stage of the transition, the size of the labor force will
decline, bringing down GDP. This will occur irrespective of
policy.
However, according to the Ministry of Economy, Trade and
Industry (2005) “There is no clear relationship” between
economic growth and population change.
The year 1960 in Japan saw 13.1% growth but labor input
increases remained stable during this time. So, size of labor
force was not a crucial variable for Japan’s economic growth.
The following graph charts the relationship between real GDP
growth rate and labor force population growth rate.
If METI is right, what is the relationship..
…between the Demographic Transition and
Economic Growth?
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The extent or ambitions for economic growth involve social
and political boundaries.
Growth is informed by societal expectations which are
conscious decisions about the purpose of society and priorities
for life.
Economic growth ambitions are revised by internal or external
shocks, the passage of history, relationships with other
countries and political culture.
Many countries have experienced similar revisions, such as the
early growth rates, the creation and effects of the middle class,
the rise of environmental consciousness and more recently,
population decline.
Japan has often revised expectations for growth
during its modern history
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From 1868-1945 the emphasis was on building strong industry,
strong military and national pride
From 1947-1970s the emphasis was on export-led growth,
national prosperity
The 1970s saw adjustments to oil shocks, inflation and
environmental ills
The 1990s saw Japan adjust to recession and the Asian
financial crisis
At the present time, Japan is adjusting to the rise of China and
the demographic transition
In Japan, the talk is only of the population ‘crisis’,
which threatens the future economy and society
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The temptation is to find someone to ‘blame’.
A popular view is that women who choose to marry later in
life (or not at all) are responsible for the declining birthrate and
therefore responsible for the future decline of Japan.
Japan therefore needs childcare and more children….But
Increased childcare will not necessarily lead to increased births
Children born in 2007 will not be ‘productive labor’ until about
2023 onwards.
Immigration is also not the antidote
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While women are often blamed, some view mass immigration
as the only solution. But…
Multicultural societies like Australia will also experience the
demographic transition.
Immigration into Japan will not be able to accommodate labor
shortage from fertility decline (OECD, 2006).
Immigration influences the size, not the structure of the
population (Productivity Commission, 2005)
Immigrants will also age along with the rest of the population.
Age-based immigration will require greater supplements over
time, leading to greater burdens of care (Australian
Government, 2004)
What is business thinking?
(NIPPON KEIDANREN)
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The Japan Business Federation argues that immigrant labor
could not compensate for the population decline, but could
revitalize industries experiencing labor shortage.
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One proposal is closer integration with East Asia – goods,
services, capital, information and people. The Japanese
Government could pursue deregulation.
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Childcare facilities, child support and residential policy would
facilitate increased fertility in Japanese communities.
What is the Government thinking?
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For the Japanese Government, the highest priorities are social
reforms for elderly, youth employment programs and childcare
to promote fertility (Japan, 2007)
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The Government will remind Japanese of “the importance of
family” (Japan, 2006)
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Promoting labor productivity and employment creation will
help the economy in the era of ageing society. Japan should
promote a ‘Multicultural Society’ (Council on Economic and
Fiscal Policy, 2006).
What is the bureaucracy thinking?
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“It is not appropriate to consider
using foreign workers to cope
with labor shortages” (Ministry of
Health, Labor and Welfare, 2005)
“we notice the emergence of large
strains in the work and living
environments and frictions
between foreign workers and
regional communities” (METI,
2005).
The root cause of frictions is the
lack of national coordination of
foreign workers following the
Immigration Act revision of 1990
(Nippon Keidanren).
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Japan should pursue East
Asian regionalism using the
European Union Single
Market Model (METI,
2005).
Women should be
encouraged to work (with
childcare assistance) and the
mandatory age of retirement
should be increased (METI,
2005)
Largely absent from the Japanese debate is the
recognition that Japan is not alone.
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A focus on birthrate policy and/or immigration policy is
unbalanced.
The demographic transition is caused by declining birthrate
and increased life expectancy
Longevity is the ambition of all societies and should be
celebrated.
The overall focus of discussion in Japan ignores the sources of
economic growth that could counterbalance the decline of
growth caused by the demographic transition.
Japan needs a New Population Policy…There
could be four elements:
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First, the superficial debate on women and immigrants,
promotion of anxiety, easy solutions and the blame game
Second, accept the demographic transition as a common
experience, not only for Japan.
Third, adopt comprehensive childcare facilities and welfare
security for the elderly.
Fourth, confront post-recession inefficiencies in the Japanese
economy; pursue innovation and productivity.
Japan lacks a culture of growth due to the recession that
impedes confidence in the future of the economy.
There is life After the demographic transition
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A strong economy would help Japan create sustainable
economic and social frameworks to prevent population
vulnerability.
Japan could lead the world with innovations, ideas and policies
that could be useful for other countries experiencing birthrate
decline and higher life expectancy.
If Japan could reclaim a culture for growth, celebrate longevity
and accept the decline in the birthrate, it would be a model for
societies on the path to a world beyond the demographic
transition.
Thank You!