Japan’s three population crises

Japan celebrates “Respect for the Aged Day” on September 16. The holiday reflects a worrying reality: the country has a record number of elderly people.

Japan’s population is falling sharply, with fewer babies being born, more elderly people in the workforce and fewer residents overall. The country is facing three demographic crises that policymakers fear will threaten the economy and its social welfare system. Japan’s Chief Cabinet Secretary Yoshimasa Hayashi has warned that the country has until the 2030s to reverse the decline in birthrates.

Japan is tackling its declining population through child-rearing policies, digitalization and work-style reforms to enable more women and the elderly to participate actively in society and the economy, according to Masashi Mizobuchi, assistant press secretary for the Ministry of Foreign Affairs. However, the country still faces three major demographic crises in the immediate future.

Aging population

According to a report by the Japanese Ministry of Internal Affairs and Communications, the country currently has 36.25 million people aged 65 and over, accounting for 29% of the population, the highest rate compared to other countries and territories in the world.

Meanwhile, many older workers are still working. The number of older workers has increased for the 20th consecutive year, reaching a record 9.14 million. Although many Japanese companies impose a mandatory retirement age of 60, the government encourages them to retain older workers who want to continue working. This flexibility helps bridge the gap until retirement benefits are available at 65. Wages and working conditions are also adjusted to accommodate older workers.

Falling birth rate

Japan recorded more than 350,000 births from January to June this year, down nearly 6% from 2023, according to health ministry statistics. This is the lowest number since 1969, when Tokyo began publishing statistics.

It was also the third year in a row that there were fewer than 400,000 births in the first half of the year – a bigger drop than the 3.6% drop in the same period last year.

Japan’s birth rate fell to 1.2 births per woman last year, one of the lowest in the world. Health Minister Keizo Takemi called the situation “very serious” and warned that Japan only had until the 2030s to reverse the trend.

Outgoing Prime Minister Fumio Kishida has made raising the birth rate a national priority, having previously pledged to double national spending on childcare within a decade.

Population decline

Japan’s population fell for the 15th consecutive year in 2023, according to government statistics released in July.

Japan’s total population peaked in 2009 at 124.89 million, of which about 3.32 million were foreigners. Despite Japan’s strict immigration policies, the number of foreigners has increased since the Covid-19 pandemic.

There is no one solution that solves all problems.

The Japanese government has long recognized the economic and social impacts of the three population crises.

Officials have taken a number of steps to reverse the country’s declining birthrate. Prime Minister Fumio Kishida’s office has allocated more child-rearing budgets to support the construction of more child-care facilities in the country. Local governments have even launched a public dating app to help Japanese people socialize, marry, and have children.

However, increasing the birth rate does not solve the labor shortage in the short term, so Japan has been opening its doors to immigration in recent years. In 2024, the country reached a record of 2 million foreign workers, aiming for another 800,000 next year, according to local media reports.

To address the population decline over the next few decades, the country must increase the number of foreign workers, according to Robert Feldman, an economist at data analytics firm Morgan Stanley MUFG Securities.