CASE STUDIES: POPULATION

Question 1

What is the case study of an ageing population?

Answer 1

Japan.

Question 2

What is happening in Japan?

Answer 2

• The population is declining - the country’s population peaked at 127.8 million in 2005 and has since dropped to around 126.5 million in 2018. Japan’s population is expected to drop below 100 million by around 2050.
• Fertility has declined substantially and the total fertility rate is an extremely low 1.43, much lower than the replacement rate of 2.1.
• The population is ageing - in 2014, 25.9% of Japan’s population was over the age of 65.
• The median age is 48.6.
• The life expectancy is 86.
• The birth rate is 7.3 and the death rate is 10.2.
• The total dependency ratio is 69 - 21 youth dependency, 48 elderly dependency.
• The population growth rate is estimated at -0.27% in 2020.
• It has a net migration rate of 0.
• The UN predicts that by 2045, for every four Japanese aged 20-65, there will be three aged 65 or over.

Question 3

What are the causes? (Japan)

Answer 3

• Over the past few decades, the salary gap between men and women has been decreasing, and thus many women are choosing to become career-focused.
• Women are finding it difficult to reconcile work with having children and choose to work first and put off having children, thereby having fewer of them, or none at all.
• The average marriage age is much higher, it has risen from 28.9 in 2005 to 30.25 in 2018.
• The average age at which women give birth to their first child has also increased from 29.1 in 2005 to 30.7 in 2015.
• There is no migration at all, the country has a net migration of 0.

Question 4

What are the problems? (Japan)

Answer 4

• There is a shortage of workers. The workforce peaked at 67.9 million in 1998, and has been declining since. This presents an increasing economic burden on the existing workforce, as well as on the government as if there is a shortage of workers then there are less tax payers and the government receives less money.
• The number of old people living in care homes or other welfare facilities is steadily rising. The cost of this care is shared between the elderly person, their family and the government. As the number of people in this situation increases, more pressure is placed on the country’s economy.
• As the number of retired people increases, this also means that more old people are claiming pensions off the government, putting more and more strain on the economy.

Question 5

What are the solutions? (Japan)

Answer 5

• As there are very few younger workers, some manufacturers have set up affiliated companies in China and other countries, however the results have been mixed.
• The possibility of expanding immigration to help reduce the rising dependency ratio appears to be politically unacceptable in Japan. Foreigners make up just 1% of Japan’s labour force. Legal immigration is practically impossible and illegal immigration is strictly suppressed.
• Pension reforms have been introduced in recent years with the income threshold required to claim a pension being raised, as well as the retirement age being raised from 65 to 70 or 75 in the coming years. Higher contributions are also required from employers.
• However, it is very likely that further changes will be required as the cost of the ageing population continues to rise.