Can Abe Tackle The Real Reason For Japan's Decline? (Procreation)


Much has been made of Japan’s latest relapse into recession. For the most part, economists have focused on the efficacy of the once much-ballyhooed “Abenomics,” the stimulus and structural reform program that was seen as the key to turning around the island nation’s torpid economy.

While Prime Minister Shinzo Abe’s ruling coalition won a sweeping electoral victory this weekend, giving him a mandate to continue his economic policies, it is increasingly clear that the epicenter of Japan’s crisis is not its Parliament, or the factory floor, but in the bedroom. Japan has been on a procreation holiday for almost a generation now, with one of the lowest fertility rates on the planet. The damage may prove impossible to overcome.

Japan’s working-age population (15-64) peaked in 1995, while the United States’ has grown 21% since then. The projections for Japan are alarming: its working-age population will drop from 79 million today to less than 52 million in 2050, according to the Stanford Institute on Longevity.

Since hitting a peak of 128 million in 2010, Japan’s overall population has dropped three years in a row.

These trends all but guarantee the long-term decline of the Japanese economy and its society. In comparison, competitors such as the United States and India are projected to continue to grow their workforces over the long term. China’s workforce, which grew rapidly over the last couple of decades, recently began to decline, as early as 2010 by one estimate, due to its one-child policy.

Some countries, like Germany or Singapore, have tried to make up for low fertility through immigration, something that remains all but unthinkable in congenitally insular Japan. Short-term importation of workers has occurred through a “foreign trainee” program, but it has stirred controversy, with some immigrant workers claiming they are being cheated and abused.

Aging is becoming a bigger issue, particularly due to the country’s average lifespan of 83 years, which is among the longest in the world. Perhaps if everyone would have the good sense, as one Japanese official put it, to “hurry up and die,” the shrinkage would be manageable.

But old Japanese don’t seem to be lining up to commit suicide. So by 2020, adult diapers are projected to outsell the infant kind. By 2040, the country will have more people over 80 than under 15, according to U.N. projections. By 2060, the number of Japanese is expected to fall from 127 million today to about 87 million, of whom almost 40% will be 65 or older.

The fiscal costs are obvious. Over the past few decades, aging has helped transform once thrifty Japan into the country with the high-income world’s highest level of government debt. The demands for more help for the elderly, notably medical care, combined with a shrinking, increasingly occasional workforce, is one reason why Abe was forced to push for a sales tax increase, one of the things that retarded Japan’s recovery.

These trends have been developing for decades. Sociologist Muriel Jolivet noted in her 1997 work Japan: The Childless Society that many Japanese women had taken a break from motherhood, in part due to male reluctance to take responsibility for raising children. This trend accelerated in the next decade. By 2010, a third of Japanese women entering their 30s were single, as were roughly one in five of those entering their 40s. That’s roughly eight times the percentage in 1960, and twice that of 2000. By 2030, according to sociologist Mika Toyota, almost one in three Japanese males may be unmarried by age 50.

Many young Japanese are not only eschewing marriage but a highly publicized sliver now show little sexual interest in each other. The percentage of sexually active female university students, according to the Japanese Association for Sex Education, has fallen from a high of 60% in 2005 to 47% in 2012.

Much has been made of a subset of young Japanese men labeled as “herbivores,” who appear more interested in comics, computer games and socializing through the Internet than in seeking out the opposite sex.  And since many only work part-time, they tend to stay longer with their parents, further slowing economic growth.

No society can thrive under such an environment, certainly not in the long run. If “animal spirits” drive entrepreneurial growth — as it did unmistakably in Japan both before and after the Second World War — those are clearly dissipating now. As prices have dropped and opportunities shriveled, fewer Japanese are interested in starting or growing families.

In the longer run, one has to wonder what kind of country Japan may become over time, something hardly irrelevant not only due to the country’s importance, but also since other key Asian countries appear to be following the demographic path it is blazing, including including South Korea, Taiwan, Singapore and China. In China, the U.S. Census Bureau estimates, the population will peak in 2026, and will then age faster than any country in the world besides Japan.

Of course, projecting population and fertility rates over the long run is difficult, and there remains a large margin for error. For example, the U.N. projects Japan’s 2100 population at 91 million, while Japan’s National Institute of Population and Social Security Research projects a population of 48 million, nearly one-half lower.

Japan’s grim demography is also leading to tragic ends for some elderly. With fewer children to take care of elderly parents, there has been a rising incidence of what the Japanese call kodokushi, or “lonely deaths” among the aged, unmarried, and childless. Given the current trends, this can only become more commonplace over time.

The Japanese “model” of low fertility still has its defenders, including those in the U.S. who point out that it allows, in the short term, for greater per capita wealth and lower carbon emissions. But most Japanese recognize that the profound morbidity of the demographic trends; 87% see an aging population as a major problem, according to a recent Pew study, compared to 57% in China and only 26% in the U.S.

And to be sure, Japan remains a supremely civilized country, with low crime rates, a brilliant artisanal tradition, and exemplary infrastructure.But none of this can likely survive under these demographic conditions. Not surprisingly, the  Japanese government, like its counterparts in western Europe and Singapore, has attempted tomake child-rearing easier by providing cash payments for families and expanding child care.

Yet to date, such compensation has been unable to make up for high housing costs and weaker familial bonds. As Toru Suzuki, senior researcher at the National Institute of Population and Society Security Research, put it in The Japan Times, “Under the social and economic systems of developed countries, the cost of a child outweighs the child’s usefulness.”

Although the United States has not embarked on such a dismal course, in large part due to a greater land mass, lower housing prices and immigration, for us, too, the twin forces of lower fertility and the retirement of baby boomers is slowing our labor force growth rate.

Ideally American fertility rates will recover with the economy, allowing us to get back to a more sustainable demography that would at least replace older people with a steady supply of young adults. What we don’t want to do is emulate Japan. There’s a price to pay for avoiding the bedroom in favor of video games, not only for individuals but societies as well.

This piece first appeared at

Joel Kotkin is executive editor of and Roger Hobbs Distinguished Fellow in Urban Studies at Chapman University, and a member of the editorial board of the Orange County Register. His newest book, The New Class Conflict is now available at Amazon and Telos Press. He is author of The City: A Global History and The Next Hundred Million: America in 2050. His most recent study, The Rise of Postfamilialism, has been widely discussed and distributed internationally. He lives in Los Angeles, CA.

Photo by Kevin Poh: Night Life @ Shinjuku, Tokyo

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The question you don't ask

The question you don't ask is whether the average Japanese citizen feels (or in fact is) better off today than in decades past. Isn't that the true test of good government policy? Not a growing "economy" as measured in dollars (or Yen), not a growing or shrinking population, not whether a country's influence in the world is growing or shrinking. The happiness of its people, both now and in the foreseeable future, should be the only thing that counts. I've seen no evidence that Japan is headed the wrong way. I see lots of evidence that we are.

low fertility doesn't explain deflation

Geography student

Low fertility rates do not explain Japan's deflation over the past 20 years and high national debt. These may be the reasons for Japan's stagnant economy. This might be due to government stimulus spending on flashy capital projects such as high speed rail that then require operating subsidies and are a drag on the economy.

It is not clear at all with rising productivity that an aging population should contribute to deflation and a stagnant economy. By investing in robotics research instead of large capital projects it is quite possible that Japan's economy would improve and increased productivity allow the country to age with no deterioration in living standards.

Colin Clark on population growth versus decline

Colin Clark’s magisterial 1967 book, “Population Growth and Land Use”, has a chapter that analyses numerous positive feedback loops in economies as populations are rising, that go into reverse when the population growth levels out or falls. This is even more significant in its economic effects, than resources like oil becoming scarcer and more expensive. The end of growth, either planned or unplanned, means serious recession and falling income, not equilibrium at the “status quo”.

The development of free markets and the creation of wealth requires, along with a culture that encourages trust and co-operation; “connections” via transport and communication, between potential participants in exchange and trade. These connections can be the result of proximity (through density), as well as by roads and other transport infrastructure. There is a limit to how much density is achievable as a substitute for transport infrastructure, because the production of low-density rural areas, especially food, has to be transported to the workers in urban industry. There is actually a correlation between the “density achieved” in urban areas throughout history, and the provision of roads in those urban areas.

Population growth is one way in which densities are increased, and “demand
pressures” result in rural land being used more intensively and efficiently.
Population growth disturbs a certain “status quo” that might have existed previously, where rural production levels were regarded as “satisfactory” to both the producers and the consumers of the produce.

As population densities increase, and rural production increases, a number of efficiencies are realised. There is increased competition, and reduced oligopoly, monopoly, and monopsony exploitation. Increased specialisation becomes possible, because of a viable number of customers for the products of the specialist. “External efficiencies” are realised by increasingly networked producers.

Economies are realised in infrastructure, social institutions, and government. Roads, bridges, harbours, etc, can be utilised by increasing numbers of people without capacity increases being immediately necessary. The same goes for churches and clergy, courts and lawyers, hospitals and doctors, other professionals, government bureaucracies, public buildings, educational and other institutions. This also allows for important advances in sanitation and health.

Labour productivity growth occurs, and less additional “capital” is required for each additional unit of output. The utilisation of land and resources previously underutilised, is a “substitute for capital”. Nevertheless, return on capital increases, AND capital formation is also increased. A rising population results in increasing returns to existing investment, encouraging more investment. Less investments “go bad”, because there is a rising number of customers for whatever products or services the investor and his competitors provide. More production capital is utilised (and even worn out) before it becomes obsolete.

The products that result from new investments, inventions, and efficiencies, are easily absorbed in a rising population; as are the redundancies and relocations that might be necessary. Younger people, of which there are more, are more mobile and receptive to change. The increases in wealth creation and demand, make society more amenable to changes in employment patterns as the result of advancing technology and methods. There are more valuable “positions” to go around, so that change is less regarded as a threat by those occupying positions of advantage.

Younger people tend to accumulate capital, while older people tend to “draw down on it”. Larger families result in pressure on the parents to save more, and on the children to provide for themselves because their inheritance will be split more ways.
(Note: Julian Simon added a further thesis to Colin Clark’s: that a higher
population includes both more inventive geniuses, and more people to purchase and enjoy the fruit of those creative geniuses).

A high proportion of government spending is inflexible to rises and falls in population. This spending is more efficient if population is higher. Much government spending is extremely difficult to reduce even when falling population justifies it. If population is falling, there is much greater pressure on politicians to cheat by inflating the money supply, as the fewer numbers of young simply cannot sustain the taxation levels necessary to keep the government running, apart from the burdens of caring for larger numbers of elderly.

Younger people are rendered less able to save, capital is “drawn down on”, returns on investment decline, more investments fail, investment declines.
Population increases demonstrated beneficial effects in Holland in the 1500′s, Britain in the late 1700′s, and Japan in the late 1800′s. Holland and Japan were economic successes while importing most of their food. A LOWER percentage of the workforce in agriculture, correlates to wealth increases. These increases in population and in wealth, result in a freer, more mobile society.

Ancient Rome in its decadent phase, illustrates the effects of falling birthrates, including increased taxation burdens and monetary debasement.
Declining populations, in ancient Rome and in Europe in the 1400′s, brought
about a simultaneous shortage of workers, and yet lack of demand. Many people clung to their source of diminishing income, becoming protective and demanding restraint of competition; others had serfdom imposed upon them by the government, their freedom to relocate and change their livelihoods being removed. These seemingly contradictory effects are the result of a reversal of the “virtuous cycle” described earlier, that occurs when population is increasing. France, in the period from from the revolution onwards, also illustrates economic decline consequent on falling birthrates.

In underpopulated lands, and where population is falling, the people themselves become more “protectionist” in sentiment, and more vulnerable to illusions regarding “planning” and regulation of production and prices. This only worsens the vicious circle of decline.