The rapid aging of Japan’s population, combined with a steady decline in the birthrate, makes it certain that the productive-age population will begin to fall sharply in the not-so-distant future. As a result, the entire population will also start shrinking, making it necessary to redesign the economic and social systems that assume continuous population growth. A diminishing population risks reducing the nation’s growth potential and, consequently, the well-being of the people.
The question at stake is how to revamp those social and economic systems in ways that meet the challenges of a shrinking population. This must be a political priority in the early part of this century. For a start, the government should create a policymaking framework that cuts across the political spectrum. Local governments and communities throughout the country, as well as individual citizens, must also consider how best to adapt our society to the new demographic trends.
The available statistics paint a grim picture. Preliminary figures from the 1999 national census put the total population for that year at 126.92 million, 1.35 million more people than in 1995 when the last survey was taken. However, the rate of growth for the five years — 1.1 percent — was the lowest since the end of World War II. The number of babies born in 2000 increased only slightly, by 11,000, to 1.189 million, the fourth lowest year-on-year rise, according to the Health, Labor and Welfare Minister. The average number of children a woman bears dropped to an all-time low of 1.34 in 1999, far below the 2.08 that is considered essential to maintain current population levels.
Japan’s population, which stood at 43.85 million in 1900, has nearly tripled since. This rapid population growth has been a major contributor to the nation’s phenomenal social and economic development of the past century. With the population reaching the saturation point, however, some of the underlying assumptions of our social systems need a fundamental review.
According to a 1997 study by the National Institute of Social Security and Population Problems, the population is estimated to peak at 127.8 million in 2007 and reach 100.5 million in 2050. This is said to be the most likely scenario. A more pessimistic scenario — one that assumes a lower birthrate — concludes that the population will peak as early as in 2004. Whichever proves accurate, it is certain that the population will begin to drop sooner or later.
The demographic composition of the nation will change markedly. Simply put, our society will have more elderly people, fewer children and fewer working-age people than it does now. In particular, the proportion of actively engaged people (those aged 20-64) will drop sharply, with every two of these people supporting one elderly person in 2025, compared with four to one at present.
Such structural changes could create long-term labor shortages and weaken the fabric of the national economy. In particular, there would be serious effects on social security. There is already deep concern about the ability of future generations to bear the growing social security burden, such as contributions to the pension, medical insurance and nursing care programs. A restructuring of the social security system is unavoidable.
A skeleton plan worked out by a joint council of the government and the ruling parties rightly calls for a “sustainable social security system,” a viable system that can be effectively maintained without putting an undue burden on both the government and the taxpayer. To that end, increases in contributions from actively engaged people would be limited while benefits to elderly people in a position of economic advantage would be restricted.
The plan also looks for a comprehensive program to stem the decline in the birthrate. There is no easy way to do that. After all, the decision to bear a child is a matter of personal choice. But it is essential to provide hands-on public support for child care. For example, building more day-care centers for working women is a step in the right direction. In a social environment conducive to child bearing and rearing, young people may be induced to get married and raise a family.
The declining population is a matter of concern to many communities as well. Some districts have ingenious programs to cushion the economic and other impacts of fewer children. In the city of Kyoto, for instance, an elementary school that was closed for lack of students, is now used as an international school for children of foreign families. The city hall is also earning some 4 million yen in annual rent. Kyoto, which worked out an urban renewal plan on the premise of a population decrease, has set a welcome example for communities coping with a falling birthrate. What is most required is “ingenuity.”
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