Advertisement

Population Decline, Labor Force Stability, and the Future of the Japanese Economy

  • Robert L. Clark
  • Naohiro Ogawa
  • Makoto Kondo
  • Rikiya Matsukura
Article

Abstract

Demographic trends in Japan are producing a declining population that is rapidly growing older. With a total fertility rate of around 1.3 children per woman, the population has already begun to decline. This article examines the impact of these demographic trends on the level of employment and economic growth that Japan is projected to experience over the next 20 years. We explore the effect of changes in labor market policies on age-specific employment rates and assess whether innovative policies can moderate the decline in employment. Public policies encouraging increased employment of women and persons aged 60 and older could partially offset the anticipated decline in employment. The importance of the Japanese experience for European policy makers is discussed.

Keywords

Low fertility Japan Population decline Population aging 

Résumé

Les évolutions démographiques au Japon conduisent au déclin et au vieillissement de la population. Avec un indice synthétique de fécondité de 1,3, la population a déjà commencé à baisser. Cet article examine l’impact de ces évolutions démographiques sur les projections de taux d’emploi et de croissance économique des vingt prochaines années. Nous explorons les effets des changements des politiques du marché du travail sur les taux d’emploi par âge, avec un intérêt particulier pour le rôle des politiques novatrices comme facteur de modération de la baisse du taux d’emploi. Les politiques en faveur de l’emploi des femmes et des personnes de 60 ans et plus pourraient en partie contrebalancer la chute attendue du taux d’emploi. L’importance de l’expérience Japonaise comme matière à réflexion pour les décideurs en Europe est discutée.

Mots-clés

Basse fécondité Japon Déclin de la population Vieillissement de la population 

Notes

Acknowledgements

The funding for this research was obtained by two grants from the National Institute of Health, NIA RO1-AG025488 and AG025247. This study was also supported by a grant obtained from the Nihon University Population Research Institute from the “Academic Frontier” Project for Private Universities: matching fund subsidy from MEXT (Ministry of Education, Culture, Sports, Science and Technology), 2006–2010. Furthermore, the authors are grateful to the UNFPA (RAS5P203) and the Japan Medical Association for their financial assistance.

References

  1. Cabinet Office. (2003). Annual report on the national lifestyle, 2003.Google Scholar
  2. Clark, R., & Ogawa, N. (1992). The effects of mandatory retirement on earnings profiles in Japan. Industrial and Labor Relations Review, 45(2), 258–266.CrossRefGoogle Scholar
  3. Clark, R., Ogawa, N., Lee, S.-H., & Matsukura, R. (2008). Older workers and national productivity in Japan. Population and Development Review, 33 (forthcoming).Google Scholar
  4. Clark, R., Ogawa, N., & Matsukura, R. (2007). Population aging, changing retirement policies and lifetime earnings profiles. In R. Clark, N. Ogawa, & A. Mason (Eds.), Population aging intergenerational transfers and the macroeconomy (pp. 17–37). Northampton, UK: Edward Elgar Publishing.Google Scholar
  5. Fukuda, S., & Morozumi, R. (2004). Economic growth under the demographic transition: A theory and some international evidence. In P. Onofri (Ed.), The economics of an ageing population (pp. 3–34). Cheltenham, UK: Edward Elgar.Google Scholar
  6. Genda, Y., Teruyama, H., & Ohta, S. (2007). Ageing and employment in Japan. In K. Hamada & H. Kato (Eds.), Ageing and the labor market in Japan (pp. 1–23). Cheltenham, UK: Edward Elgar.Google Scholar
  7. Hamada, K., & Kato, H. (Eds.). (2007). Ageing and the labor market in Japan. Cheltenham, UK: Edward Elgar.Google Scholar
  8. Hashimoto, M. (1990). The Japanese labor market in a comparative perspective with the United States. Kalamazoo, MI: W.E Upjohn Institute for Employment Research.Google Scholar
  9. Hayashi, F., & Prescott, E. (2004). The 1990s in Japan: A lost decade. In P. Onofri (Ed.), The economics of an ageing population (pp. 35–74). Cheltenham, UK: Edward Elgar.Google Scholar
  10. Japan Institute for Labour Policy and Training. (2004). Freeter no Ishiki to Jittai (Attitudes and Lives of Freeters). Research report no. 146.Google Scholar
  11. Jorgenson, D., & Motohashi, K. (2003). Economic growth of Japanand and the United States in the information age. RIETI discussion paper series 03-E-015.Google Scholar
  12. Keese, M. (2006). Population ageing in Europe and Asia: From challenges to opportunities. Power point slide show presented at the “impact of ageing: A common challenge to Europe and Asia”, June 7–9, 2006, Vienna.Google Scholar
  13. Kimura, T. (2002). Economic growth after successful structural reforms?—implication of measurement adjusted TFP change. Economic Review, 8–34.Google Scholar
  14. Kurokawa, F., Minetaki, K., Nishimura, K., & Shirai, M. (2004). In P. Onofri (Ed.), The economics of an ageing population (pp. 75–156). Cheltenham, UK: Edward Elgar.Google Scholar
  15. Lee, R., & Carter, L. (1992). Modeling and forecasting the time series of U.S. mortality. Journal of the American Statistical Association, 87, 659–671.CrossRefGoogle Scholar
  16. Lee, R., & Tuljapurkar, S. (1994). Stochastic population projections for the United States: Beyond high, medium and low. Journal of the American Statistical Association, 89, 1175–1189.CrossRefGoogle Scholar
  17. Lesthage, R., & Willems, P. (1999). Is low fertility only a temporary phenomenon in the European Union? Population and Development Review, 25, 211–228.CrossRefGoogle Scholar
  18. MacKellar, L., Ermolieva, T., Horlacker, D., & Mayhew, L. (Eds.). (2000). The economic impacts of population ageing in Japan. Cheltenham, UK: Edward Elgar.Google Scholar
  19. Mason, A., & Ogawa, N. (2001). Population, labor force, saving and Japan’s future. In M. Bloomstrom, B. Gangnes, & S. Lacroix (Eds.), Japan’s new economy: Continuity and change in the twenty-first century (pp. 48–74). Oxford: Oxford University Press.Google Scholar
  20. Matsukura, R., Ogawa, N., & Clark, R. (2007a). Analysis of employment patterns and the changing demographic structure of Japan. The Japan Economy, Spring, 82–153.CrossRefGoogle Scholar
  21. Matsukura, R., Retherford, R. D., & Ogawa, N. (2007b). Declining fertility in Japan: Its mechanism and policy responses. Asia-Pacific Population Journal, 22(2), 33–50.Google Scholar
  22. Ministry of Health, Labour, Welfare. (2007). Vital statistics of Japan. Tokyo: Ministry of Health Labour and Welfare Statistics Association.Google Scholar
  23. Ministry of Internal Affairs and Communications. (2007). Population census of Japan. Tokyo: Japan Statistical Association.Google Scholar
  24. NIKKEInet Interactive. (April 22, 2008). Japan’s labor force may shrink to two-thirds in 2050: White paper. http://www.nni.nikkei.co.jp/cgi-bin/print.cgi.
  25. Ogawa, N., & Ermisch, J. (1996). Family structure, home time demands, and the employment patterns of Japanese married women. Journal of Labor Economics, 14, 677–702.CrossRefGoogle Scholar
  26. Ogawa, N., Kondo, M., Tamura, M., Matsukura, R., Saito, T., Mason, A., et al. (2003). Long-term perspectives for japan: an analysis based on a macroeconomic-demographic-social security model with emphasis on human capital. Tokyo: Nihon University Population Research Institute.Google Scholar
  27. Retherford, R., & Ogawa, N. (2006). Japan’s baby bust: Causes, implications, and policy responses. In F. Harris (Ed.), The baby bust: Who will do the work? Who will pay the taxes? (pp. 5–47). Boulder: Rowman & Littlefield Publishers, Inc.Google Scholar
  28. Sakai, H., & Asaoka, H. (2007). Factors affecting labor force participation in Japan: Empirical study of labor supply of the elderly and females. In K. Hamada & H. Kato (Eds.), Ageing and the labor market in Japan (pp. 24–56). Cheltenham, UK: Edward Elgar.Google Scholar
  29. Sakuragawa, M., & Makino, T. (2007). Labor force ageing and economic growth in Japan. In K. Hamada & H. Kato (Eds.), Ageing and the labor market in Japan (pp. 57–74). Cheltenham, UK: Edward Elgar.Google Scholar
  30. Statistics Bureau. (2007). Annual report on the labour force survey. Tokyo: Japan Statistical Association.Google Scholar
  31. Takayama, N. (1998). The morning after in Japan: Its declining population, too generous pensions and a weakened economy. Tokyo: Maruzen Co.Google Scholar
  32. The Japan Times. (April 23, 2008). Labor force forecast to plummet by 2050.Google Scholar

Copyright information

© Springer Science+Business Media B.V. 2009

Authors and Affiliations

  • Robert L. Clark
    • 1
  • Naohiro Ogawa
    • 2
  • Makoto Kondo
    • 3
  • Rikiya Matsukura
    • 2
  1. 1.College of ManagementNorth Carolina State UniversityRaleighUSA
  2. 2.Nihon University Population Research InstituteTokyoJapan
  3. 3.Kobe Gakuin UniversityKobeJapan

Personalised recommendations