japan aging population essay

More than 1 in 10 people in Japan are aged 80 or over. Here's how its ageing population is reshaping the country

Japan's ageing population has implications for its economy and workforce. Image:  REUTERS/Issei Kato

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Stay up to date:, ageing and longevity.

This article was published in September 2019 and updated in September 2023.

• More than 1 in 10 people in Japan are now aged 80 or older, and the country consistently rates as having the world's oldest population.
• This is having a profound impact on Japan's economy, workforce and society.
• The World Economic Forum's Future of Jobs Report 2023 finds that only 35% of companies prioritize workers aged over 55.

Japan is getting ever greyer. More than 1 in 10 people in the country are now aged 80 or older , according to the latest national data. Almost a third of its population is over 65 – an estimated 36.23 million. And there are more people than ever blowing out 100 birthday candles.

Japan consistently has the oldest population in the world – with significantly more people over the age of 65 than Italy, the next oldest country.

Impact of ageing population on Japan

The global shift towards a more elderly demographic is a transformation that is already shaping government policies and affecting societies and economies around the world. Here’s how its impacts are being felt in Japan.

In 2020, the International Monetary Fund predicted that " the ageing and shrinking population will strain Japan’s public finances , as age-related spending – such as on healthcare and pensions – rises while the tax base shrinks”.

It's true that Japan's GDP hasn't exactly flourished in recent years, but as Deloitte reports, the country " continues to post economic gains ", albeit small ones, and remains the second-largest economy of the G7 countries , with GDP of around $4.2 trillion, as the chart below shows.

That said, Prime Minister Fumio Kishida said in January 2023 that " Japan is standing on the verge of whether we can continue to function as a society ," facing as it does the twin threats of falling birth rates and an ever-increasing elderly population.

There is a global myth that productivity declines as workers age. In fact, including older workers is an untapped source for growth.

The world has entered a new phase of demographic development where people are living longer and healthier lives. As government pension schemes are generally ill-equipped to manage this change, insurers and other private-sector stakeholders have an opportunity to step in.

The World Economic Forum, along with the Organisation for Economic Co-operation and Development (OECD) and AARP , have created a learning collaborative with over 50 global employers including AIG, Allianz, Aegon, Home Instead, Invesco and Mercer. These companies represent over two million employees and $1 trillion in annual revenue.

Learn more in our impact story .

2. Productivity

Japan is already facing a labour shortage, and by 2040 it could be short of 11 million workers , a recent study found. This led it to introduce the Guideline of Measures for Ageing Society in 2018, to encourage older people to continue in the workforce.

In 2022, almost half of Japanese firms relied on workers over the age of 70 . Globally, meanwhile, only 35% of companies prioritize workers aged over 55 , according to the World Economic Forum's Future of Jobs Report 2023.

With technology and digitalization also in the mix, Prime Minister Kishida pledged $7.6 billion earlier this year to train workers for more high-skilled jobs in the next five years, reports The Japan Times . But some experts say that, without relaxing the country's strict immigration laws , filling that labour gap will be a slow burn.

Have you read?

With life expectancy increasing, here’s how 4 countries are addressing their ageing populations, the world's oldest populations, why is inflation so low in japan.

Japan's birth rate hit a record low in 2022. The fertility rate was 1.2565 , far below the rate of 2.07 considered necessary to maintain a stable population, reports Reuters.

The pandemic only exacerbated Japan's demographic challenges, leading not just to more deaths, but also to fewer marriages and births.

This is a ticking time bomb for Japan’s social security system, which is struggling to meet the costs of a retired population with fewer workers paying taxes.

Given Japan's ageing population, healthcare is an inevitable crunch point.

Promoting a move from hospitals to home is one way the government has been trying to tackle the problem, encouraging patient-requested care, self-medication and remote monitoring of patients in their homes.

Carebots to assist the elderly have also been trialled for several years, but automating care has not turned out to be the panacea Japan hoped for.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

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A Shrinking Society in Japan

Hosted by Michael Barbaro; produced by Bianca Giaever, Kelly Prime, Adizah Eghan and Alexandra Leigh Young; edited by Lisa Chow; and engineered by Chris Wood.

The persistently low birthrate in the country has caused the population to contract. The U.S. is on a similar path.

From The New York Times I’m Michael Barbaro. This is The Daily.

On yesterday’s show, Sabrina Tavernise described why, for the first time in generations, the birth rate in the United States has been falling and the long-term risks posed by that trend. One of those risks is that the U.S. could eventually follow the path of a country like Japan, where a persistently low birth rate has resulted in a shrinking population that grows smaller and smaller by the year. Today: I turn to Tokyo bureau chief Motoko Rich to understand what that change has looked and felt like inside Japan.

It’s Wednesday, May 5.

Motoko tell me about this town that you had visited.

So, it’s a little town called Nagoro. It’s on the island of Shikoku. And it’s pretty remote. Japan’s not that big of a country and yet it seemed to take a really long time to get here. We flew from Tokyo to this medium-sized city called Kochi. And then from there, we have to take a train and then a bus. And we’re clearly just moving further and further away from known civilization. There are no convenience stores, no gas stations, and then you finally get to this little remote village.

And what is it like there?

So, it’s kind of eerie because you’re driving into town and you’ve already been coming up these winding roads and signs of civilization have been disappearing. And you start to see these figures, one perched on a little wall on the side of the road. There’s what appears to be an old woman crouched over in a field, there looks like this guy is kind of shaking chestnut’s out a tree. There are a couple of construction workers on a cigarette break.

And it’s really, I don’t know, profoundly sort of sad and moving to see all this. As I walk around town I keep seeing these people out of the corner of my eye. And I think they’re real people.

And you see, they all have button eyes and little mouths.

They actually look quite lifelike.

And you realize, they’re all dolls.

Dolls. Yes, human-sized dolls.

Like stuffed dolls?

Stuffed dolls. Like oversized cloth dolls.

Dozens and dozens and dozens of these life-sized dolls.

Like a mom and dad, a kid a little baby.

Dolls everywhere.

And what’s even more eerie is that there’s a school in the middle of the town. And just looks like a big school building with a big gravel yard in front. Then you go upstairs. And there are a couple of classrooms, and you peek in and they’re filled with dolls.

It turns out that this is a village that only has about two dozen adults and there are no children. And there’s this woman’s Tsukimi Ayano, who’s decided to kind of fill the place with dolls.

So, why is it that there are so few people in this town. How is it that it has basically become a town of dolls?

So, basically, the birth rate in Nagoro has just fallen to zero. There are no children in this town at all and there haven’t been since the last two graduated from elementary school in 2012. Most of the people there are just old. And that’s kind of emblematic of what’s going on in the rest of Japan. Japan is technically the grayest country in the world. Close to 30 percent of the population is over 65 and the population is shrinking. It’s been shrinking since 2007. And you have this overhang of a lot of old people, which in and of itself is not a problem, except that if you don’t have enough young people to work, to pay taxes, to work in the nursing homes, you’ve got this imbalance.

And how did Japan get to this stage of having such a low birth rate?

Well, I think it’s a long story. And you have to kind of back up a little bit.

Japan rose from the ashes of World War II.

So, after the war, Japan was determined to come roaring back.

It grew into the world’s second largest economy, thanks to the diligence of its people and the strong bonds between management and workers.

And the way they sort of did that was through this social contract that they had, mainly with men, which is that if you went to work for a company, you would devote your life to that. You would work morning, noon and night, as long hours as demanded by the company. And you’d become the salary man, in an exchange for which you were guaranteed lifetime employment. You knew you had job security. You knew you’d get your raises and your promotions as you got older, until you retired.

So, this is the birth of Japan’s notoriously intense work culture where people — overwhelmingly men — seem to put work at the center of their lives.

Exactly. And at the same time, you often would get married and you’d have a wife who was at home, tending the home fires, taking care of the house, taking care of the children.

And then in the 1970s, as in many other places around the world, women start to enter the workforce. Mostly unmarried women who are working until they got married. But then, there are some women who wanted to work longer than that. And then,

the economy was really doing well and going strong. And Japan was booming.

As Japanese people devoted themselves to the money game.

Japanese companies were buying up real estate in Manhattan and buying up companies all over America. And everybody was writing books about how we were going to get our lunch eaten by Japan.

The real estate and stock markets shot up, creating a bubble.

And then everything came crashing to a halt in the early 90s.

And a prolonged period of stagnation set in. It’s been called the lost 20 years.

So at that point, a lot of men who had previously had all these really cushy, secure, lifelong employment jobs, were either thrown out of their jobs or their wages were completely stagnating. And so to keep families afloat, more and more women enter the workforce.

And what does that do to the birthrate in Japan?

So, at that point the birthrate does start to fall, because instead of the woman only being at home, they’re working, helping the country try and recover from this crash, keeping their families afloat. And at first, I don’t think people see this as a particular problem. Japan is a very crowded, populous country. And fewer people being born at the time I don’t think was seen as such a big deal.

Right. It’s kind of seen as a necessary trade off.

Right. There trying to get the economy back on its feet.

OK, so then what happens?

So, this is a pretty long period of stagnation for Japan. They’re having a really hard time climbing out of this bust. And during this period, a lot of the men are starting to feel very insecure, because either they can’t get a good job, or even if they have what’s considered a decent job, their wages are not increasing. So, they’re feeling like, oh, maybe I shouldn’t get married because I don’t think that I can support a wife and a family. And that, of course, leads to even more decline in the birthrate.

So, suddenly more women are working, which has an impact on the birth rate. And then, it sounds like men are not working as much, or are working but are financially insecure, so they are not inclined to have children.

Exactly. And as all of this is happening, there’s one thing that isn’t changing, and this is this very deeply entrenched, cultural pattern that when couples do have children, the woman do all the work at home.

And when you say all the work at home?

So, I moved to Japan in the summer of 2016. And I’m a working mom myself. And my husband’s great. He cooks dinner and he does laundry. But of course, like any couple with two children, we sometimes argue about who’s doing what and who’s doing more.

But when I looked around, I noticed no comparison with Japanese woman. They were pretty much doing everything. And it wasn’t just that they were doing all the work at home, it was that the expectations of what moms should do were much higher than anything that I had experienced as a working mom in the States.

What do you mean?

So, for example, at daycare one of the things that’s required is that the parents, and it’s always the mom, has to keep a log. Every morning and every evening she has to record what they ate, what their moods were, what time they went to sleep. And this is every day that you’re putting this down in a little notebook. And that just seems to me like a whole bunch of extra labor for the mom.

And then she’s also, you know, instead of sending the kid in an outfit that they might come home with paint splattered and dirt on it, they’re sending them three outfits, so that they can change. They’re washing their sneakers at the end of every week. They’re washing their whole set of change of sheets and blankets. And the other thing that you notice when you’re just walking around Japan and you look at all the apartment buildings, if you look on the balconies, everybody’s got laundry hanging out. And that’s because most middle class families, and even some fairly wealthy families, don’t have dryers. So, that makes doing a load of laundry that much more work. And so, there are all these women that are hanging laundry at night. And as a reporting project, I sort of became obsessed with really diving into this. What is it like to be a working mother in Japan? What specifically they were doing and why it was that they seemed so harried and overburdened?

And so, I spent a lot of time hanging out at daycare centers and talking to women as they came for pickup, because it usually was mostly women. And then, this one woman Kazuko Yoshida agreed to let us spend quite a lot of time with her. So, one weekday a photographer and I went to our apartment and we got there around 6:00. And she and her husband are there with two kids. And they’re getting ready for work. But I notice little things, right? He’s sitting at the table with the kids. And she’s rushing around. She’s cooking the breakfast. She’s clearing the table. She’s packing their bags. And then it comes time to take them to daycare and he says, OK, I’m going to take the kids to daycare. So, in my mind that means he’s going to take the kids daycare on his own.

It turns out that he’s going to accompany her to take the kids to daycare.

Why can’t he do it himself?

He just feels really anxious and insecure about it. And so he said, he just didn’t feel that he could handle these two young children on his own. That he could help his wife, but he couldn’t do it and by himself. The youngest is a baby. The older is a toddler. Wrangling two kids, you know, it’s a lot of work, I get it. But still, he just didn’t think he could handle it.

And so, we accompanied Ms. Yoshida to work. She takes us into her office. She’s a graphics designer. She lets us look around. And then we say, you know what? We’re going to come back and pick you up when you leave work, so we can go with you to pick-up at daycare. Because she’s going to definitely do pick-up because her husband’s going to be working late. So, we get there to pick her up. We get to the station. And we’re about to get on the train to go pick up her kids. And she’s like, let’s let a train go by. So, we let one train go by. She’s like, let’s let another train go by.

She said, this is the only time during the day that I have to myself.

This is pretty intense.

It is very intense. And in fact, a lot of women who are still trying to decide what they want to do with their lives, are looking at that model and saying, I’m not sure I want that. There might be another way. And that other way means that a lot of women are either not getting married at all, or even if they’re getting married, they’re not having children.

They’re basically opting out of motherhood because of the version of motherhood that they see in the culture exactly.

We’ll be right back.

Motoko, you said that a big reason why Japanese women are opting out of motherhood is because so much of the burden of parenting falls on women. So, how widespread is this opting out phenomenon?

So, the proportion of women who have never been married is higher than it’s ever been. And it’s really interesting. I started to explore this, partly because when I first came to Japan, every once in a while my husband and I would go out on a Friday night and we look around in the restaurants. And everywhere we looked it was all these groups of single women. And they look like they’re really having a great time. There were no men around. And I thought, OK, well, what’s going on here? It’s not like you never see that in the West. But I just didn’t see all that many couples, and it just seemed like there was this very segregated social life. So, I wanted to find out what was going on there.

And as I started to talk to a lot of single women, it turned out that there’s this whole kind of infrastructure that’s growing around the fact that women have decided to opt out of marriage.

They are working, so they have a good income. There are these, like, solo karaoke bars or centers, where they have women only sections with these single booths, where these women can go in and sing their hearts out. There are these restaurants, where they’re for Yakiniku, where women go and they’re kind of grilling their own meat at their table. And that used to be kind of a thing that you would do, you would go sit at a group table. But there are these restaurants now where they have these solo booths for people to sit.

There are even like these photo studios where you can go get a wedding portrait taken. Get dressed up in the wedding dress, but you’re not getting married. It’s called like a solo wedding photo.

A solo wedding photo?

I mean that’s a bit of an oxymoron, but I guess a celebration of a non-marriage.

Exactly. There are women who are like, I love the dress. I love the idea of being celebrated. I love the idea of looking more beautiful than I’ll ever look. I want to memorialize my youth in this beautiful dress, with this beautiful photo, but I don’t need the actual wedding to do so.

So this phenomenon is so widespread that the culture is adjusting to women not wanting to be married?

And in fairness, it’s not necessarily that they’re always saying I don’t want to be married. But they’re making these choices. They want to work. They want to have a good time. They don’t want to be trapped in these situations where they’re at home all the time and not having fun and that if they do have children, they’re doing all the work. And so, sometimes it’s more tacit, it’s more subliminal. But they are drifting away from these traditional family structures.

And I imagine all these unmarried women are, of course, not having that many children.

Right. And it’s pretty striking how many unmarried women there are now. So, 20 years ago, if you looked at the cohort of women between the ages of 35 and 39, only 10 percent had never been married. Fast forward to today, that’s nearly a quarter of those women have never been married.

So, more than double.

Exactly. There are a lot of single women now.

So, in that prime childbearing phase of life, a full one quarter of Japanese women are unmarried and therefore, unlikely to have children.

What’s interesting about the portrait you’re painting is that up to a point, it resembles changes in the West. Women going to work, liking that work, making decisions based around the fact that they want to be co-equals in earning. And yet, that change in countries like the U.S. is accompanied by a kind of redistribution of parenting responsibilities and domestic work. And it seems like Japan only had half the revolution. The women go to work. But then, things don’t change at home the way they have in many parts of the world.

Right. So, interestingly, women are working so much that the labor force participation rate among women in Japan is higher than it is even in the United States. And yet, women are doing the vast majority of the work at home and the men are still doing so little. So, check this statistic out: Men in Japan do on average 41 minutes a day of housework and child care. And that compares to men in the U.S. who are doing just under 2 and 1/2 hours of housework and childcare a day.

Wow, so a very meaningful difference.

Yeah. And by the way, that figure for Japan is the lowest among the wealthiest countries in the world.

So in Japan right now, you have one of the highest workforce participation of women and the lowest domestic participation for men. I mean, that’s a huge disjunction.

You could probably say it’s the biggest gap in the world.

So, now that there is this phenomenon of women opting out of this gap that you have just described — not wanting to perpetuate it and therefore not have children — what are the implications of this incredibly low birth rate that you have described?

Well, one of the most obvious and biggest implications is that you suddenly have this society in which everyone is old.

According to the United Nations, its population is the oldest in the world.

There was a time when it looked like Japan would become the number one economic power in the world.

Under a million babies born, just last year.

And when you have fewer people being born —

You do not have consumption and old people do not consume.

— you have fewer people growing up to become workers. And that means you have fewer people contributing to the Social Security system that you need to sustain this growing population of old people.

The benefits going to the older generation, whereas the burden is borne by the working and young generation.

And you also have fewer people to become doctors and nurses and home health aides, caregivers.

As the elderly population increases, more staff are required to treat them. This is creating a growing financial burden for hospitals.

And is that showing up in the Japanese economy?

Absolutely. Japanese employers are desperate for workers, particularly in areas that are very labor intensive.

So, given that this demographic problem, this low birthrate, is now understood to be causing this economic problem in Japan, what is Japan doing about it?

So, a couple of things. One is that after years and years of resisting, Japan is slowly starting to open its borders and allow non-Japanese people to move here, but in a pretty limited way. So, a couple of years ago —

Japan’s parliament has passed a new law.

— parliament passed a law.

Opening the door to nearly 350,000 foreign workers, in a country where immigration has long been taboo.

That allowed a new category of visas for people from other countries to come in and work.

Both blue collar and skilled workers will be allowed in under different schemes.

And the conditions for coming in were pretty stark. So, people who get these visas can only stay for five years. They’re not allowed to bring their families. There’s a pretty high bar that they have to learn to speak Japanese. So, I think it’s going to be quite difficult for them to attract a lot of people to take these jobs. And even if they do, they’re only issuing 350,000 visas over five years, which is kind of a drop in the bucket for the need.

Just to be sure I understand this, despite having a population crisis, Japan is letting immigrants in, but they cannot bring their families who I imagine would help them procreate?

That’s how inhospitable Japan is to people who aren’t Japanese. It’s I think sort of a fear based idea that we don’t want people to put down roots here. Former Prime Minister Shinzo Abe would not use the word immigration. And he often would say this is not an immigration policy, it’s a foreign worker policy. So, I think it was designed specifically to allay fears that Japan would become a nation of immigrants, which is something that, I wouldn’t say in majority, but certainly a very large and vocal segment of the population does not want.

And then the other solution to the economic problem, sort of ironically, is this notion of getting more women to go to work. When Prime Minister Abe came into office, he said, one of the things he wanted to do to pull the economy out of a long period of stagnation was to push and empower women. And so, he called this policy “womenomics.”

It’s an idea that’s known as womenomics. Womenomics is the name for Abe’s policy to close Japan’s gender gap. An ambitious plan to boost the number of female managers by 30 percent in four years.

And the idea is, if more and more women are working, you have this sort of untapped pool of highly educated, talented, native born workers here in Japan. And so, he was saying we need more women to go to work. But of course, the problem with that, as we’ve seen, is that when the women go to work, they either decide that they like working so much that they don’t want to get married and have children or, if they’re working and they also have children, it’s so difficult to combine the two that is certainly not an incentive to have a lot of children.

Right. So, neither of the programs that you have just identified would seem to do almost anything to increase the birthrate. It might temporarily improve the economy, but if the long-term problem in Japan is it not enough babies are being born, neither of these things is going to do all that much to change that.

Right. So, the thing that would really change things is a dramatic shift in the culture. And we’re starting to see really tiny baby steps. Sometimes on the weekend, you’ll see dads at the playground with their kids. You hear of fathers that are learning to cook and do more housework. And then you have this politician, who’s actually the son of a former prime minister who is a pretty famous, well-known friend of George Bush: Junichiro Koizumi, his son Shinjiro Koizumi, who’s now the environment minister. And his wife was pregnant when they got married.

And he announced right before the baby was born that he was going to take paternity leave. But, when he first announced that he was considering taking paternity leave, believe it or not, he got a lot of blowback. So there were some conservative politicians who said, this is a sign that he’s not very serious about his job. And on social media, people were criticizing him for even daring to suggest that he might take paternity leave. How dare he, that kind of stuff.

So, it took him a while to actually firmly announce that he definitely was planning to do it. And then, when the baby was born, here’s what he did. He took two weeks over a course of three months and he said, he was going to be kind of telecommuting for part of that.

So, this was definitely paternity leave light.

Absolutely. A significant gesture. But like you said, paternity leave light.

And what did that episode tell you?

Well, on the one hand, it feels like there’s an effort to try. His father certainly didn’t take paternity leave. There was never any question that he would take leave when his children were born. So, the fact that his son, a prominent politician he’s mooted as potentially being a future prime minister, had decided that he would stake some of his political capital to take paternity leave is definitely a gesture of people trying to change the culture. On the other hand, the blowback that he got — the fact that he had to make a big deal of just taking two weeks off — shows how difficult it is to change this really entrenched culture of what roles men and what roles women are supposed to play.

Motoko, I’m curious. What do you expect to happen to that town, now filled with more dolls than people, that you started our conversation describing?

I think it’s going to disappear. I mean there are only two dozen people left. There’s nobody of childbearing age left, so nobody’s going to be having any more kids. And they’re all pretty old. So as they die off, the town will die off. The only people left will be adults.

Motoko, thank you very much.

The new prime minister of Japan, Yoshihide Suga, has said that raising the country’s birthrate is a major priority and has pledged to make the country’s national insurance system pay for fertility treatments to encourage families to have more children. Japan’s government now projects that unless the birth rate changes, the country’s population, which now stands at 126 million, will fall below 100 million by 2053 and fall to 88 million by 2065. We’ll be right back.

Here’s what else you need to know today. On Tuesday, Pfizer, whose Covid-19 vaccine is expected to be authorized in the coming days for adolescents between 12 and 15, said it would seek authorization to give the vaccine to children between the ages of 2 and 11 later this fall. So far, the F.D.A. has authorized Pfizer’s vaccine under a temporary emergency order and has yet to grant the vaccine full approval. During a call with investors Pfizer said it would soon seek such approval from the government.

Full approval would allow Pfizer to market its vaccine directly to consumers and could make it easier for companies, schools and government agencies to require that workers be vaccinated before returning to work in person.

Today’s episode was produced by Bianca Giaever, Adizah Eghan, Kelly Prime and Alexandra Leigh Young. It was edited by Lisa Chow and engineered by Chris Wood.

That’s it for The Daily. I’m Michael Barbaro. See you tomorrow.

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Japan is the “grayest” nation in the world. Close to 30 percent of the population is over 65, and the population has been shrinking since 2007.

One major factor affecting the low birthrate is how Japan’s economy has affected women’s lives.

A prolonged period of stagnation that began in the 1990s brought more and more women into the work force. However, the traditionally large share of domestic duties, including child care, remained with them.

Many are now turning away from this intense version of motherhood, and the proportion of women who have never been married is higher than ever.

With the birthrate in the United States also dropping, what are the implications of a shrinking population, and what lessons can be learned from Japan?

On today’s episode

Motoko Rich , the Tokyo bureau chief for The New York Times.

Background reading

The contracting population in Japan poses a serious threat to the country’s economic vitality and the security of its social safety net.

As Japan’s population shrinks and ages, rural areas are emptying out. In one childless village, two dozen adults compensate for the absence with the company of hundreds of giant handmade dolls .

The birthrate in the United States declined for the sixth straight year in 2020 and has fallen by about 19 percent since its recent peak in 2007.

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Motoko Rich contributed reporting.

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• v.1(1); 2019 Oct 31

Population aging in Japan: policy transformation, sustainable development goals, universal health coverage, and social determinates of health

Hiroki nakatani.

1 Human Resource Strategy Center for Global Health, National Center for Global Health and Medicine, Tokyo, Japan;

2 Keio University Global Research Institute, Tokyo, Japan.

Japan is aging rapidly, and its society is changing. Population aging and social change are mutually linked and appear to form a vicious cycle. Post-war Japan started to invest intensively in infectious disease control by expanding health services and achieving universal medical insurance coverage in 1961. The high economic growth in the 1960s contributed to generate a thick middle class layer, but the lingering economic slump after the economic bubble crisis after 1991 and globalization weakened this segment of society. Health disparity has been acknowledged and social determinates of health have been focused. In this article, the author reviewed the response course to health challenges posed by population aging in Japan, and aims to offer lessons to learn for Asian nations that are also rapidly aging. The core viewpoints include: i ) review health policy transformations until the super-aged society, ii ) discuss how domestic issues in aging can be a global issue, iii ) analyze its relationship with Japanese global health engagement, iv ) debate the context of social determinates of health, and v ) synthesize these issues and translate to future directions.

Introduction

Japan is aging rapidly, those over 65 already constituted 27.7% of the total population in 2017. This figure is the highest in the world and is projected to grow continuously up to 38.4% in 2065 ( 1 ). However, population aging is a result of remarkable success in health improvement and economic development in a country or region, and a similar trend is becoming visible globally, particularly in Asia. Hence, Japan is only a front runner of a future aging world, and her experience will be beneficial for countries that are to follow. However, the demographic impact of aging is more complicated than just a growing number of senior citizens. Another side of the coin is that decline in birthrate to below the death rate results in population decrease, and especially reduction of the young workforce. The population dynamics in Japan are very dramatic, as shown in Figure 1 . The Japanese population climbed to a peak within the twentieth century, and is projected to return to the level of the previous century within the next 100 years.

Long-term changes in total population and estimated future population. Data source: Population to 2010: materials prepared by National Spatial Planning and Regional Policy Bureau, Ministry of Land, Infrastructure Transport and Tourism (MLIT) based on the national census results by Ministry of Internal Affairs and Communications (MIC) and the analysis of long-term chronological population distribution data in the Japanese islands (1974) by National Land Agency. The population thereafter: materials prepared by National Spatial Planning and Regional Policy Bureau, MLIT based on Population Projection for Japan by National Institute of Population and Social Security Research (estimated in January 2012).

This demographic change poses challenges to all aspects of life for individuals and the society as a whole. How can we extend healthy lifespan, and not merely physical longevity? How is the extended lifespan supported financially? With an increasing in-need population and declining contributors, how can we sustain the social infrastructure including social security (medical insurance and pension) and other essential services such as transportation and response capacity to natural disasters? How can we perpetuate innovations and vitality in a predominantly aged society? All these are perceived as "clear and present dangers" and shared by Japanese leaders and the population as a whole.

Japanese were proud to achieve universal medical insurance coverage and pension in 1961 ( 2 ) and believe that this achievement has contributed to generate a thick healthy middle class layer, who has brought prosperity and stability in the 60', 70' and 80'. However, a success story itself could turn out to be a hurdle to introduce necessary changes, as Jared Diamond wrote in his book Collapse: How Societies Choose to Fail or Survive. The courage to make painful decisions about values, "Which of the values that formerly served society well can continue to be maintained under newly changed circumstances? Which of these treasured values must instead be jettisoned and replaced with different approaches?" is critical for sustaining a society ( 3 ). These words are particularly relevant to Japan, which is already a super-aged society with low birthrate and population decline.

With the above background, in this article, the author wishes to: i ) review health policy transformations until the super-aged society, ii ) discuss how domestic issues in aging can be a global issue, iii ) analyze its relationship with Japanese global health engagement, iv ) debate the context of social health determinates, and v ) synthesize these issues and translate to future directions.

Transformation of health policy until the super-aged society

Demographic change is not readily visible in daily life and is only appreciated when it becomes too apparent suddenly. However, while experts in demography can illustrate future population size and composition relatively easily, such "inconvenient truth" is difficult to communicate to the public as well as policymakers. Early warning was voiced. For example, the late Dr. Taro Takemi, Past President of Japan Medical Association published an article on Monthly Chuo- Koron, entitled "How can we cope with the growing number of senior citizens ?" in 1955. He foresaw that population aging required changes in health care delivery and demanded a critical review of future design in social security. All his concerns have proven to be real nearly half a century later when the "inconvenient truth" becomes too visible. Figure 2 illustrates the historical development or transformation of health policy in Japan until Japan becomes a super-aged society. Aging in other countries is also plotted to show how they may plan to introduce significant policy changes when their populations become aged progressively in the future as in Japan.

Aging rates of Asian countries and evolution of Japan's elderly care system. Data source: http://www8.cao.go.jp/kourei/whitepaper/w-2018/html/zenbun/s1_1_2.html

In this regard, the post-World War II health policies in Japan can be categorized into four phases: i ) towards UHC (until 1961); ii ) expansion of social security (until 1980); iii ) preparation for aging society (until 2000), and iv ) enhancing sustainability (until 2025).

Towards UHC (until 1961)

The central policy issues in the '50s were expansion of medical insurance and pension coverage for every citizen in Japan. Coverage started from large companies, public sectors and local communities, but small industry workers and their families were left behind. Universal coverage was finally achieved in 1961 when GDP per capita was US$563 (current equivalent) ( 4 ). At that time, the average life expectancy was 70.2 years for women and 66.0 for men, and the average age of the Japanese population was 28 years. The respective figures for 2017 were US$38,428, 87 years, 81 years for men, and 47 years.

Expansion of social security (until 1980)

The '60s were remembered for the amazing rate of economic growth, and Japan became the number 2 global economic power in 1968, replacing West Germany. Industrialization and urbanization progressed at a rapid pace. Old family-based welfare, while offering public support for impoverished people, was being challenged. The on Welfare for the Elderly Act was enacted in 1963, which expanded social support for senior citizens in need. According to the copayment system of medical insurance, service receivers should pay 30% of the cost each time they receive service (remaining 70% is directly claimed by the service providers to insurance bodies). Increasing political pressure that the 30% co-payment was discouraging senior citizens from accessing services drove the government to waive the copayment for seniors aged over 70 years in 1973. This scheme was judged feasible at that time, when the economy was strong and the proportion of senior citizens was less than 10%. The act was welcomed initially, but later proved too costly. Eventually, politicians paid a high political price when re-introducing the copayment, losing elections due to such an unpopular move. The evolution and remarkable outcomes as well as increasing challenges of the Japanese medical insurance system are well documented by Ikegami and Campbell ( 5 ).

Preparation for aging society (until 2000)

As the proportion of senior citizen increased to almost 10%, bureaucrats started to raise concerns over the trend of increasing medical expenditures. Mr. Hitoshi Yoshimura, Director-General of Insurance Bureau of Ministry of Health (1982 to 1984) and later Vice-Minister of Health (1984 to 1986) was a strong advocate of the urgent need for medical cost containment due to expensive health technologies and aging, among many other factors. Mr.Yoshimura was not shy to present his pessimistic view on the sustainability of social security, particularly medical insurance. He advocated various measures to "rationalize" medical cost. A significant outcome was the enactment of the Health and Medical Services Act for the Aged in 1982. The Act has two components: health promotion after age 40 and financial balancing mechanism to support medical insurance bodies, particularly community-based insurance bodies to pay medical bills of senior citizens.

Along with continued population aging and reduction of family size, Japan needed to consider socializing nursing care for the aged by expanding capacity of relevant institutions. Also, a consensus was reached that hospital admission due to "social" needs and not medical reasons should be a target of rationalization. This so-called "social hospitalization" phenomenon and the long waiting list to enter nursing homes became a political agenda in the national parliament as well as prefectural assemblies. This resulted in systematic investment from the public sector. The Ministry of Health, Ministry of Finance and Ministry of Home Affairs launched the "Gold Plan" in 1989 (over 65 population: 11.6%), investing 6 trillion yen to build more long-term care institutions. The plan was modified in 1994 (over 65 population: 14.1) to expand home care programs ( 6 ). These developments provided the infrastructure to introduce the long-term care insurance (LTCI) ( 7 ), which came into operation in 2000 (over 65 population: 17.4%). The LTCI covers both home and institutional care according to the assessed level of disability.

Enhancing sustainability (until 2025)

By implementation of the LTCI, the social security architecture for the aged was completed, with medical care insurance for sickness, pension for livelihood support and LTCI for long-term disability. However, upon entering the 21st century, the continuation of rapid aging and sharp birthrate decline questioned the sustainability of medical care insurance and pension. Attempts were made to increase the premium and copayment of service receivers and to enhance the efficiency of service providers as well as to expand public support for medical insurance bodies. Significant reforms were legislated in 2006 and 2015. However, it has been noted that the reform of medical insurance should be discussed in the broader context of social security. For example, the increase in demand for LTCI is greater than that for medical insurance. From 2000 to 2018, the number of users of the LTCI increased three-fold from 1.49 to 4.74 million. In response to such an increase in demand, the service cost rose from 3.6 to 10 trillion yen from 2000 to 2016, and the per capita insurance premium of senior citizens themselves also increased from 2911 to 5514 yen ( 8 ).

On the other hand, the medical cost grew but at a much moderate pace from 30.1 trillion yen in 2000 to 42.2 trillion in 2017. This was a result of tighter control of the health insurance reimbursement scheme, but this capping strategy posed challenges for both health care professionals and health care industries. A book entitled Collapse of Medical System ( 9 ) that addressed this issue became a bestseller in 2006.

In addition, due to the continued Japan economic slump after the economic bubble collapse in 1991, many young people failed to find full-fledged employment and accepted irregular jobs with less wages and lower insurance and pension contributions. Thus, social insurance premiums from workers were not raised. Altogether, balance sheets of both medical and long-term care insurance have deteriorated from reduced contributions and increased demand. The financial gaps are filled by transferring medical costs from young people to seniors within insurance bodies and infusion from tax revenues. Consequently, out of the 97.7 trillion yen government budget in FY 2018 ( 10 ), 33.8 trillion yen was spent on social security. Hence, health is the biggest budget item, six times larger than that for education, and science and technology, which is generally regarded as investment for future human capital.

All these generated needs to look at all aspects of social security by avoiding silo approaches to medical insurance and LTCI, as well as disproportionate consumption of the general budget. The government solution was to increase the consumption tax from 5% to 8% and eventually to 10% by 2019. A bipartisan agreement was reached in 2012 to use a considerable portion of the increased revenue to enhance the sustainability of social security, ahead of 2025 when the post-war baby boomers (1947-49) would reach the age of over 75 and demand greater medical and long-term care services. Hence, the National Council of Social Security Reform was called by the Cabinet Office, and a report ( 11 ) including a road map of "total reform" was submitted to the Office on 6 August 2013.

The report was perceived as unique in addressing challenges in a cross-cutting manner and recommending well coordinated policy change, taking into account changes of social, family and individual values. The report presented the grand vision and proposed reform on social measures to address the declining number of children, medical and long-term care insurance, and pension.

Convergence of global and domestic health agendas

If one turns attention to global health, it is surprising to see a convergence of the Japanese domestic agenda with the global health agenda. The life expectancy of the world has reached 71 years and many "developing countries" have graduated from being recipient countries to mid-income countries with limited access to development aid from more affluent countries. This was made possible by massive investments in control of diseases and infections (HIV/AIDS, tuberculosis, malaria, and neglected tropical disease) followed by maternal and child health. The former included access to medicine and preventive measures such as anti-retroviral medicines for HIV/AIDS and long lasting insecticide-treated bed-nets for malaria. These brought a drastic decrease in deaths and an increase in a healthy workforce that drove socio-economic development in once communicable disease-affected low-income countries. In the case of tropical diseases, a typical example is onchocerciasis or river blindness. This parasitic disease was a common cause of blindness among populations along the river side in tropical regions, particularly in West Africa. River side fertile farming land was abandoned due to the disease. However, mass preventive use of ivermectin (Mectizan) almost eliminated river blindness and led to economic recovery. The vicious circle of ill health and poverty was broken. The same was observed in Japan during the early post-war period. In 1954, the leading cause of death was tuberculosis, which consumed 28% of the medical care budget ( 12 ). The most affected population was young students and workers. Japan aggressively controlled tuberculosis by mass screening and case management at public health centers together with public financial support for care under official diagnosis and treatment regimens. That resulted in a sharp decline in mortality and morbidity. Healthier workers contributed to a remarkable economic growth, which was unprecedented in the world. Furthermore, the health infrastructure built for tuberculosis served as the basis for meeting changing health needs, such as control of non-communicable diseases (NCD). Mass screening originally designed for tuberculosis was used for early detection of hypertension, which was the main risk factor for brain hemorrhage and replaced tuberculosis as the leading cause of death in 1951.

This success story was convincing enough for Japanese leaders and politicians to engage themselves in global health cooperation. During the period of the economic bubble in Japan from 1986 to 1991, Japanese ODA was greatly expanded, which reaffirmed its "soft power" in foreign policy. Meanwhile, reflecting the end of the cold war, a new paradigm was sought globally. As a nation with a constitutional commitment to renounce war, Japan welcomed and promoted the new paradigm of international cooperation, from "security against war" to "human security", which addresses both "freedom from fear of war and other insecurity issues" and "freedom from want of better health and other human conditions" for all people. Human security became the principal value of Japanese diplomacy, and naturally Japan started to voice proposals for global health. At the 1998 Birmingham Summit, then Prime Minister Hashimoto proposed several steps to improve the effectiveness of international cooperation against parasitic diseases. In 2000, the Kyushu-Okinawa G8 Summit adopted the Okinawa Infectious Diseases Initiative, which led global fights against three major infections; HIV/AIDS, tuberculosis and malaria. In every subsequent G7/8 summit hosted by Japan, health was on the agenda in head of state meetings. For example, the G8 Hokkaido Toyako Summit in 2008 addressed the importance of health systems to support disease control activities. With this background, Japan welcomed sustainable development goals (SDGs), and the Prime Minister personally expressed his commitment repeatedly at the United Nations (UN) and in his contribution to the Lancet ( 13 ). The G7 Iseshima Summit in 2016 was the first summit meeting after the adoption of SDGs at the UN. The leaders addressed universal health coverage (UHC) as an approach for global health strategies for both communicable and non-communicable diseases under the SDGs framework. At the same time, they emphasized that health systems and UHC are the needed infrastructure to tackle health emergencies such as epidemics, which have been viewed as an increased risk in the interconnected world. The health topics at the summits had expanded from communicable diseases control to a more inclusive approach such as health systems and UHC, which is the course that Japan had taken with not only many successes but also bitter lessons. The Japanese experience can be useful for other nations, particularly Asian countries, which are experiencing a similar course of development and foreseeing rapid aging of their populations.

At the same time, Japanese politicians and business leaders have become more sensitive about the shrinking domestic market due to population aging and decline, and recognize the need to cultivate new industries beyond the production of consumer goods. Advisers to the Prime Minister identified the time gap of population aging among nations as business opportunities for health- and aging-related industries. Being a forerunner in population aging, Japan has been developing systems and technologies for the "silver" market, and hence may have a relative advantage. The linkage of domestic health and technology with global needs and issues as well as business is being formulated. To facilitate such transformation, The Health and Medical Strategy Promotion Act was promulgated in May 2014, which led to the establishment of Headquarters for Healthcare and Medical Strategy (hereinafter referred to as "Headquarters") in June 2014. The Headquarters served as an engine of coordinated policy, and the Cabinet approved the Healthcare Policy in July 2014, including a sentence "Healthcare Policy shall promote overseas activities of the healthcare sector by building mutually beneficial relationships with foreign countries, especially in the fields of medicine and long-term care". In addition, in preparation for the new paradigm of international cooperation beyond the millennium development goals (MDGs), the Headquarters approved the Basic Design for Peace and Health (Global Health Cooperation) in September 2015. The Basic Design emphasizes the importance of UHC and our commitment to SDGs. With this background, the Asia Health and Wellbeing Initiative (AHWIN) ( 14 ) was launched in 2016 with wide participation by public and private entities in Japan and international collaborators.

Japan's engagement in global health

The forum for Japanese health diplomacy was G7/G8 summits and multi-lateral UN agencies such as WHO, mainly on the basic framework of human security and SDGs. However, the global environment changed with the emergence of other groups such as BRICs, and G7 leadership also changed the global picture of engagement of G20 countries. The USA and the UK, which had been generous donors in the past, are paying more attention to their domestic issues, while the relative position of Japan and Germany in global health has gained more weight. Also, UHC involves non-health sectors, particularly the Ministry of Finance, private sectors and communities. From this perspective, Japan has started to expand collaboration with the World Bank group in establishing global financing facilities for health and nutrition for mothers and children, as well as pandemic emergency financing facilities. Such collaboration is being expanded to the Regional Banks such as the Asia Development Bank. Also, Japan's stewardship in organizing the G20 Meetings has several characteristics, including head of state meetings including both finance and health ministers, and a separate health minister meeting focusing on UHC, aging and emerging infections including antimicrobial resistance. The series of meetings and communiques left a legacy of serious involvement of G20 in global health as well as its own domestic issues.

In the World Health Organization (WHO), the new Director-General, Dr. Tedros Adhanom Gehbreyesus was appointed in July 2017 by direct voting of all member states. He started to transform WHO into the "engine" to accelerate the achievement of SDG3: ensure healthy lives and promote well-being for all at all ages, through the 13th General Programme of Work ( 15 ) (GPW13). The GPW13 sets the targets of triple billion by 2023: one billion more people benefit from UHC; one billion more people have better protection from health emergencies, and one billion more people enjoy better health and well-being. The main pillar of the triple billion is UHC which is defined in one of the 13 targets under SDG3. Each goal of SDGs has a set of targets and indicators for monitoring. Target 3.8 under SDG3 states "Achieve universal health coverage, including financial risk protection, access to quality essential health-care services and access to safe, effective, quality and affordable essential medicines and vaccines for all". The legitimacy of the UN comes from the approval of the heads of states gathered in the UN by the General Assembly's formal adoption of the SDGs in September 2015. Hence, in the next few years, all global health initiatives will link with the SDGs to justify their legitimacy, and Japan is committed to engage in both domestic and international activities.

Recognition of social determinants of health challenges and mitigation through SDGs/UHC

Commitment to SDGs urged Japan to review critically domestic challenges; for example, health gaps that were difficult to recognize in Japan. Under the post-war regime, the bipartisan political agenda was to generate and maintain a thick middle class layer, and the idea of social gaps and their linkage with health conditions tended to be rejected. However, the long economic slump after the economic bubble crisis together with globalization diminished traditional life-long full-time employment, and blue color jobs were increasingly taken up by Asian neighbors. Also, there were significant changes in the family and its value. Under such a social environment, the Japanese political climate became fluid, except the Koizumi Cabinet (2001-2006) which enjoyed populist support. However, Koizumi's market-oriented approach fueled the demand for fundamental social changes, leading to social movement that brought landslide victory for the opposition party, the Democratic Party of Japan (DPJ), in 2009. The DPJ raised many untouched issues such as poverty among young parents. The Party promised drastic overhaul of the county and attracted initial support. However, due to the rapid ascension of the Party, the leadership lacked skill and experience in running the government. Handling of the 11 March 2011 Tōhoku earthquake/tsunami and nuclear accident highlighted their weakness in governance. Eventually, they lost the general election in 2012. During the period of DPJ rule, evidence such as health disparity and social determinates of health was accumulated. Thereafter, the Liberal Democratic Party regained power and gave priority to economic revitalization, but did not forget the need to address social issues caused by aging and its consequences.

If we look at healthy longevity, Japan has a national health promotion strategy endorsed by the Cabinet since 1978 (revised in 1988). The earlier strategy emphasized the life-course approach, early detection of major NCDs and health promotive activities. The third version was renamed Health Japan 21 and was launched in 2000 with a clear aim of extending a healthy life expectancy. However, the progress report released in 2011 showed that out of 59 targets, only 16.9% were accomplished, 42.4% showed some progress, 23.7% were unchanged and 15.3% deteriorated. The unchanged or worsened targets include decreases in prevalence of metabolic syndrome, hyperlipidemia, and diabetic complications, and the number of steps walked per day. These results raised alarm. The second version of Health Japan 21 ( 16 ) issued in 2012 clearly states that the overarching objectives of the second version were to improve healthy life expectancy and narrow health gaps among prefectures (difference in lifespan of two years for men and 2.7 years for women). Then it urged national policies in the following areas: prevention of onset and progression of NCDs, maintaining functions for social wellbeing, cultivating an environment to support health maintenance, and improving lifestyle and social environment for nutrition, exercise, rest, alcohol consumption, smoking, and oral health.

After the turn of the century, the bipartisan political agenda has been the sustainability of social security; first pension, followed by medical insurance, and finally the long-term care insurance scheme. After several reform attempts of individual components, it was recognized that the individual approach had limitations and all components should be reviewed comprehensively. Also, there is broad consensus that our UHC would not be sustainable in the face of increasing senior citizens, declining workforce and increasingly intensive and costly care, as illustrated by the National Council of Reform of Social Security Report ( 11 ). The report proposed systematic and comprehensive reform across pension, medical insurance, long-term care insurance and support for child care. According to the Report, the government is moving to ensure universal coverage of client-centered comprehensive health, medical and nursing care support at the community level. This requires significant transformation of service provisions. For example, for a community with a high proportion of senior citizens, acute care service is likely over-supplied while services for chronic illness and rehabilitation may remain under-supplied. All prefectures are mandated by the revised Medical Care Act to plan and transform service provisions ahead of 2025 when the baby boomers become over 75.

However, aging challenges will continue. As illustrated in Figure 3 , the absolute number of senior citizens over 65 will reach a peak around 2042 when the sons or daughters of baby boomers become over 65. The ratio of senior citizens will continue to increase, but the absolute number will decline. However, the cohort of new seniors will be entirely different from previous generations. The likelihood of them being single and part-time workers before retirement will be much higher than the previous generation. The social determinants of health will matter very much because this generation may be disadvantaged in social capital.

Changes of age groups in Japan. Data source: http://www.ipss.go.jp/pp-zenkoku/j/zenkoku2017/pp_zenkoku2017.asp http://www.ipss.go.jp/ppzenkoku/j/zenkoku2017/db_zenkoku2017/db_s_suikeikekka_1.html

The ways forward: review and comments on recent policy

Prime Minister Abe was in office for 2,616 days at the end of February 2019 and became the second longest serving prime minister in post-war Japan, after Mr. Eisaku Sato who served 2,798 days. His priority for domestic policy is economic revitalization and active measures against aging and low birthrate. Moreover, he views these also from an international perspective, particularly Asia where rapid aging is progressing. In this context, the Basic Principles of the Asia Health and Wellbeing Initiative launched in 2016 was revised in 2018 ( 14 ). The underlying philosophy is to enhance cooperation to meet the common challenges of aging by i ) sharing Japanese experience (both positive and negative), ii ) expanding services with the concept of UHC, iii ) accepting care workers to train in Japan who will return home to serve their own aging populations, and iv ) R&D taking advantage of Japanese health services and products. This initiative is coordinated by the Cabinet Office, and inter-ministerial works have begun. For example, to accept more care workers, the Immigration Act was amended in 2018 to expand the target from care for the elderly to broader aspects of services and products that support long life, including housing and food.

As describe above, the Cabinet Office launched the Headquarters in May 2016 aiming to lead implementing the SDGs both domestically and internationally. Furthermore, the initiatives include establishment of the SDGs Promotion Roundtable Meeting, where a wide range of stakeholders (including government, NGO/NPOs, experts, private sectors, international organizations and domestic organizations) engage in constructive dialogue. Business communities also participate because they see tremendous opportunities. Echoing such government initiatives, the Japan Business Federation launched Society 5.0 for SDGs ( 17 ) with broad participation by business communities.

Synergetic efforts participated in by both public and private sectors have been started to address both domestic and international health challenges. Such spirit of public-private partnership to achieve win-win relations is a rare phenomenon in Japan, and is anticipated to create new value out of collaboration beyond social/ corporate responsibilities. SDGs serve as a catalyst for collective efforts toward sustainable development and surely will occupy a central position in future health agendas in Japan and beyond.

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The Consequences of Population Ageing in Japan

Population ageing is indisputably one of the most reframing social phenomena of the 21 st century. World Health Organization (WHO) (2018) predicts that the world population will be ageing and the proportion of people aged 60 years and older will almost double from 12% to 22% between 2015 and 2050. By 2050, the population aged 60 years or over will be almost 434 million worldwide. At the present moment, the world is experiencing a dramatic demographic change and no country is immune to the consequences of population ageing. The increase in life expectancy and the decrease in the birth rate are both main achievements in the healthcare system and factors that will have a huge impact on future generations. Japan will be particularly affected by the process of population ageing since the country has the highest proportion of elderly people compared to any other country in the world. According to the projections of the National Institute of Population and Social Security Research (2016), by 2036, one in three people in Japan will be elderly (65 years of age and over) meaning that the proportion of the elderly generation will continue to increase throughout the next 50 years. Using the demographical data from the years 2014-2015, Hiroshi Yoshida and Masahiro Ishigaki, economists from Tohoku University in Sendai, Miyagi, established a countdown to the national extinction, which estimates that there will be only one Japanese child in the world on August 16, 3766 [Weller, 2016]. This demographic trend in Japan is altering the lives of people, creating new responsibilities for the Japanese government, and changing aspects of the Japanese social life.

Firstly, population ageing will cause economic consequences to Japan. The main mark of the increase in the elderly generation tends to be the downward shift in the labor force that is a major factor in production. As stated by Colacelli and Corugedo (2018), this demographic tendency will have adverse effects on real GDP by about 15% in the next 40 years. Due to the ageing of Japanese people, there is also an issue to address the labor shortage. Since elderly people retire and leave workplaces, there is not enough young generation to fulfill this shortage by virtue of the low fertility rate. In 2015, Japan has not already met the demand for workers with 125 jobs for every 100 job seekers, who apply for work [Warnock, 2015]. Consequently, big industrial companies, which produce vehicles and electronics, do not have the workforce to continue production at the current production level. Thus, the country may lose its position as being one of the largest economies and market leaders in the world. In the 1980-1990s, the labor shortage led many Japanese companies to increase the mandatory retirement age from 55 to 65 and allow their workers to work after retirement [Clark et al., 2014]. The growing number of retired people encouraged the government to increase the pension benefits and even yet the retirement age might go even higher in the future if the older age population continues to rise. According to the former Japanese Prime Minister Shinzo Abe, the elderly should continue working and participate in community activities predicting the government plan to raise the optional age for retirement to 71 or older [Sanderson, 2018]. With the condition that the government of Japan finances approximately 20% of social security benefits, the increase in pensions and costs of healthcare services will directly impact the government revenues; hence, the government should make relevant adjustments as the number of elderly people is continuously rising. Therefore, the Japanese government should anticipate the future economic consequences of population ageing and constitute policies in advance.

Secondly, it is obvious that the population ageing will cause social transformations in Japan. Japanese society has a traditional value of caring for elderly people, where the eldest son is responsible for looking after his elderly parents. There is another tradition in Japan of three-generation households (grandparents, parents, children), in which a married couple takes care of both parents and children. Oi (2015) states that 177,600 people aged between 15 and 29 look after their elderly family members. Moreover, since the life expectancy of the Japanese elderly has increased, the family care of old people became less viable. The migration of young people from rural areas to urban areas of Japan required new actions to be taken by the government – the introduction of nursing homes and special healthcare programs for the elderly. In 2000, the government of Japan introduced a social care system that aims to avoid burdening families and provides cover in the last stages of life [Kavedzija, 2018]. According to McNeill (2015), the country closes 400 primary and secondary schools to open care centers for elderly people each year. Despite positive aspects of this social care system, the low fertility rate and the high growth rate of population ageing discloses another phenomenon of kodokushi , or lonely death, which can be interpreted as a demise of traditional values of Japan. Thus, the aging population ageing changes social norms established in Japanese society.

The decline in birth fertility and the increase in the longevity of life are causing the elder generation to rise throughout the world. The demographic phenomenon of population ageing that is unprecedented in the whole of human history leads to changes in the people wants and needs. As for now in Central Asia for instance birth rates are over the 2.1 total fertility rate which is considered to be a threshold for sustainable population growth. In case of life expectancy the highest age belongs to Kazakhstan with 73 years where the shortest one to Turkmenistan with 68 years (World Bank, 2020). Moreover, the working age population share in the total number of population in Central Asia is also considered to be high where Uzbekistan takes the lead with 67% and Tajikistan comes last with 60% (World Bank, 2020). Taking these factors into consideration, the population and workforce in Central Asian countries are rather young compared with many countries especially European ones and cases like Japan in Asia. Therefore currently ageing issues usually do not take a critical place in Central Asian governments’ agenda due to having a significant share of working age population and increasing number of population.

It is essential for countries to prepare for the economic and social consequences of the aging population. As the number of people increases, it is significant for the governments to design and promote innovative policies specifically targeted to elderly people, including policies, which address employment, healthcare system, infrastructure, and social security. Since the population ageing will be a feature for the foreseeable future of Japan, the Japanese government should adjust its policies and implement measures needed to avoid the economic and social consequences of this trend. The key to this drastic demographic shift is to adapt long-term solutions that will as much as possible mitigate the negative outcomes of the population ageing in Japan.

References:

Clark, Robert L., Matsukura, Rikiya, and Ogawa, Naohiro (2014). Retirement Transition in Japan. Retrieved from https://siepr.stanford.edu/sites/default/files/publications/14-013_0.pdf . Accessed on 10.10.2020.

Colacelli, Mariana and Corugedo, Emilio Fernandez (2018). Macroeconomic Effects of Japan’s Demographics: Can Structural Reforms Reverse Them? Retrieved from https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=&ved=2ahUKEwjpx5PtjrPsAhXqlYsKHcF5Cf0QFjABegQIBhAC&url=https%3A%2F%2Fwww.imf.org%2F~%2Fmedia%2FFiles%2FPublications%2FWP%2F2018%2Fwp18248.ashx&usg=AOvVaw03yKcs0Y5jAb88d2Z5cNq7 . Accessed on 10.10.2020.

Kavedzija, Iza (2018). Japan Has the World’s Oldest Population – This Is What We Can Learn from Their Social Care Model. Retrieved from https://www.independent.co.uk/voices/japan-elderly-social-care-system-uk-nhs-health-old-people-a8377631.html . Accessed on 10.10.2020.

McNeill, David (2015). Falling Japanese Population Puts Focus on Low Birth Rate. Retrieved from https://www.irishtimes.com/news/world/asia-pacific/falling-japanese-population-puts-focus-on-low-birth-rate-1.2450457 . Accessed on 10.10.2020.

National Institute of Population and Social Security Research (2016). Population Projections for Japan (2016-2065) . Summary. Retrieved from http://www.ipss.go.jp/pp-zenkoku/e/zenkoku_e2017/pp_zenkoku2017e_gaiyou.html . Accessed on 10.10.2020.

Oi, Mariko (2015). Who Will Look After Japan’s Elderly? Retrieved from https://www.bbc.com/news/world-asia-31901943 . Accessed on 10.10.2020.

Sanderson, Sertan (2018). Japan Plans to Raise Pension Age Beyond 70. Retrieved from https://www.dw.com/en/japan-plans-to-raise-pension-age-beyond-70/a-42629344 . Accessed on 10.10.2020.

Warnock, Eleanor (2015). Japan Consumer Prices Up, But Spending Sluggish . Retrieved from https://www.marketwatch.com/story/japan-consumer-prices-up-but-spending-sluggish-2015-12-24 . Accessed on 10.10.2020.

Weller, Chris (2016). This Doomsday Clock Tells You When Japan’s Sex Problem Will Cause the Country to Go Extinct. Retrieved from https://www.businessinsider.com/demographic-time-bomb-clock-japan-2016-9 . Accessed on 10.10.2020.

World Bank (2020). Life Expectancy at birth, total (years). Retrieved from https://data.worldbank.org/indicator/SP.DYN.LE00.IN . Accessed on 04.11.2020.

World Bank (2020). Population ages 15-64 (% of total population). Retrieved from https://data.worldbank.org/indicator/SP.POP.1564.TO.ZS . Accessed on 04.11.2020.

World Health Organization (2018). Ageing and Health. Retrieved from https://www.who.int/news-room/fact-sheets/detail/ageing-and-health . Accessed on 10.10.2020.

Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.

Ilana Dautova

Junior research fellow.

Dautova Ilana holds a Bachelor of Science degree in Economics from KIMEP University (Almaty, Kazakhstan). She has also studied at the Foundation course at Lancaster University (Lancaster, United Kingdom) and on the exchange program at Ewha Womans University (Seoul, South Korea). Previously, she worked as a business development manager at the POSCO International Corporation.

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Japan’s ageing population poses urgent risk to society, says PM

Fumio Kishida says country may be unable to function if birthrate does not rise

Japan’s low birthrate and ageing population pose an urgent risk to society, the country’s prime minister, Fumio Kishida, has said, as he pledged to address the issue by establishing a new government agency.

Birthrates are declining in many developed countries, but in Japan the issue is particularly acute because it has the world’s second highest proportion of people aged 65 and over, after the tiny state of Monaco, according to World Bank data.

“The number of births dropped below 800,000 last year, according to estimates,” Kishida told lawmakers in a policy address marking the start of a new parliament session on Monday.

“Japan is standing on the verge of whether we can continue to function as a society,” he said. “Focusing attention on policies regarding children and child-rearing is an issue that cannot wait and cannot be postponed.”

The conservative leader said his policies – including launching the new children and families agency in April – were designed to support parents and ensure the “sustainability” of the world’s third largest economy.

Kishida added that he eventually wanted the government to double its spending on child-related programmes. “We must build a child-first social economy to reverse the [low] birthrate,” he said.

Japan has a population of 125 million and has long struggled with how to provide for its fast-growing number of elderly residents.

Birthrates are slowing in many countries including Japan’s closest neighbours, owing to factors including rising living costs, more women entering the workforce and people choosing to have children later.

Official data showed last week that China’s population shrank in 2022, for the first time in more than six decades.

Japan’s previous efforts to encourage people to have more babies have had limited impact despite subsidies for pregnancy, childbirth and childcare. Some experts say government subsidies still tend to target parents who already have children rather than removing difficulties that are discouraging young people from starting families.

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Home — Essay Samples — Geography & Travel — Japan — A Healthy Aging Society in Japan

A Healthy Aging Society in Japan

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A level sociology revision – education, families, research methods, crime and deviance and more!

Japan’s Declining and Ageing Population

Table of Contents

Last year Japan’s population declined by 300, 000, to 126 million, and and its population is predicted to decline to 87 million by 2040.

Japan also has an ‘ageing population’ – it is already one of the world’s oldest nations, which a median age of 46, and its predicted that by 2040 there will be three senior citizens for every child under 15, the opposite of the situation in 1975.

This is an interesting case study relevant to the ‘ ageing population ‘ topic within A-level sociology’s families and household’s option (AQA 7192/2).

Why is this happening?

Excluding Monaco, Japan has the highest life expectancy of any country in the world – 83.7, and a very low fertility rate of 1.45. However, these figures are not too dissimilar from some European countries, so what really explains Japan’s declining population is it low immigration rate – only 1.8% of Japanese are foreign, compared to 8.6% in the UK for example!

What will the consequences be:

Nicholas Eberstadt argues that we already seeing some of the consequences:

• Labour shortages, especially in care work, hospitality, construction and agriculture.
• 400 school closures a year.
• The emergence of ‘ghost towns’ as the population decreases
• Increased burden on elderly welfare – by 2060 36% of its population will be 65 or older.

Eberstadt suggests that Japan’s future has only been imagined in Science Fiction (perhaps Kim Stanley Robinson can offer some help?).

Why is the Fertility Rate so Low?

It’s basically a combination of two factors:

• Economic problems – 50% of the population are in precarious jobs, and economic insecurity is a key reason for not having children. Also, if couples were in a position to have children childcare is too expensive for both partners to remain in work, so this may scupper the desires of even those in permanent jobs!
• Traditional gender values remain intact – Japan is the 114th most gender unequal country in the world – traditional and patriarchal values remain in-tact – women don’t want children out of wedlock or with men with no economic prospects – which is about half of all men in Japan!

Why is Migration so Low?

Japan is geographically remote and culturally homogeneous. Japan has long discouraged immigration – they see it as a threat to Japans’s culture and low crime rate – in fact they point to migration across Europe as an example of its negative impacts.

How is the government going to tackle the crisis?

There are a range of measures…

• Government sponsored ‘speed dating’ services.
• By providing longer maternity leave and childcare
• To offset the shrinking labour force through a ‘robot revolution’.

Is there an Upside?

Well, there’s more land per head, and because Japan is the first to transition into what will likely become a global trend, it’s an opportunity for it to become a world leader in technologies that can assist an ageing population.

Adapted from The Week 2nd December 2017.

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SPICE is a program of the Freeman Spogli Institute for International Studies.

Japan's Aging Population

Compiled April 2003 Links Verified July 2005

Articles and Essays

The Japanese Ministry of Health, Labour and Welfare Presents an overview of the responsibilities and administrative activities of the Ministry of Health, Labour and Welfare (formerly the Ministry of Health and Welfare and the Ministry of Labour). Provides an explanation of the administrative structure of the Ministry, White Papers and Reports, Policy Information, Statistics and Other Data, and links to related sites.

General Principles Concerning Measures for the Aging A report from the Japanese Ministry of Foreign Affairs. Outlines former Prime Minister Ryutaro Hashimoto's thoughts on some of the issues Japan faces and the ways it is dealing withthem as proposed at the 1996 Group of Seven Summit in Lyon, France.

Demographic Trends and their Implications for Japan's Future A report from the Japanese Ministry of Foreign Affairs. Discusses the drop in Japan's fertility rates, the choice of individuals to remain single, co-residence with parents, the timing of births, the graying society, women's growing care burden, the changing family organization, and the burden of supporting an aging society.

Elderly Care and Women Part of the Women's Online Media of Japan site. This article by Professor Keiko Higuchi explores changes in the lifestyles of women in the face of an aging society and the realities of caregiving, discusses the establishment of the Women's Association for a Better Aging Society and participation in policy making.

Chiba City News Illustrates how the city of Chiba, Japan is responding to the challenges of an aging population.

Health and Welfare Services for the Elderly Part of the Ministry of Health, Labour, and Welfare's Annual Report on Health and Welfare 1999. Provides detailed charts with breakdowns of Health Service System for the Elderly, The Number of Elderly Participants per 1,000 Population in FY 1996, Health Services for the Elderly, Health Services Facilities for the Elderly, and Designated Home Visit Nursing Care Services for the Elderly.

Society Part of the Ministry of Foreign Affairs' publication, The Japan of Today. Presents statistical information, in narrative and chart forms, on Japan's population structure, social security, and social welfare systems.

Income of People over 60 Years Old Data from the Public Opinion Survey on Household Savings and Consumption from The Central Council for Savings Information. Provides information on the source of income for people over 60 years old.

International Comparisons of Old-age Pensions From the Annual Report of Health and Welfare from the Ministry of Health and Welfare. Offers comparative figures for Japan, the United States, and several European nations.

International Comparison of Public Opinion on Supporting Elderly Parents Data from a survey of people aged 18 to 24 from Japan, U.S.A., U.K., Germany, France, Sweden, South Korea, Philippines, Thailand, Brazil, and Russia. From The 6th World Youth Survey, Youth Affairs Administration, Management and Coordination Agency.

Households with Older Occupants Offers a comparison of households with older occupants 1980-2000.

Japan's economy is emerging from a long winter. What could its wilderness years teach us?

Analysis Japan's economy is emerging from a long winter. What could its wilderness years teach us?

From the viewing gallery atop the Tokyo Skytree, the world's tallest tower, locals and tourists gather daily to gasp in awe at the vast expanse and sheer density of this vibrant city.

Once the capital of a nation that seemed unstoppable on the path to global financial domination, it has spent the past three decades flirting with almost constant recessions.

Suddenly, seemingly overnight, its fortunes appear to have changed.

In late February, the Tokyo Stock Exchange soared to a new record, finally rescaling the dizzying heights of 1989, in a time before the rot set in.

Then, a fortnight ago, it raised interest rates for the first time since 2007. For those who missed it, Japan's official interest rates now sit at the princely rate of zero per cent.

At a time when the rest of the developed world has desperately been battling the worst outbreak of inflation in half a century, with a torrid series of rate hikes that have seen living standards plummet, Japan for decades has been grappling with the opposite.

While long considered an economic outlier, in many respects it could be regarded as a trendsetter.

For years, there has been talk that China may be on the cusp of emulating the Japanese experience; a massive boom that initially helped fuel global economic growth only to implode with a long and steady slide into the economic abyss.

But Japan could provide a glimpse into the future for us all.

Has it finally overcome the long economic winter? Maybe not just yet.

Ageing pain, shrinking gain

The 1980s were known as the Decade of Greed. But it was really the decade of Japan.

Japanese investors and corporations scoured the globe, hoovering up businesses, office towers, mines and real estate as the yen soared on the back of a powerhouse manufacturing and trading tour de force.

At home, real estate prices headed into orbit. At one stage, the Imperial Palace, perched on a 3.36 square kilometre piece of land in the centre of the city, was worth more than the entire state of California.

It all peaked on New Year's Eve 1989, when Japanese stocks closed out the year at a record after a sixfold increase during the decade. And then the bubble burst, slowly at first before gathering pace.

Asset prices headed south as most other developed nations hiked interest rates to battle inflation. Investments soured and Japanese banks, having financed a global debt binge during the previous decade, began to unravel, led by the implosion of the Long Term Credit Bank of Japan.

As its economy shifted down a gear, many in the developed world shifted focus to China as the next great Asian miracle. Led by the United States, western economies, and even many Japanese firms, shifted their industrial base to mainland China to exploit a cheaper workforce and profit from a rapidly urbanising economy.

Japan's problems were heightened by its demographics. Some argue demographics are the root cause.

With almost no migration, and a developed world birthrate, Japanese society was stung by a rapidly aging and ultimately, shrinking workforce.

In that arena, as in many others, it appears to have been ahead of its time. China is now facing the exact same demographic problem. Most of the developed world, particularly those with lower immigration levels, are also looking ahead to a greying population.

Interestingly, while Japan's economy has shrunk as its population has fallen, individually, the Japanese people are better off. GDP per head is growing, as workers remain in the workforce far longer. Productivity outpaces that of many other rich nations.

This is almost the exact opposite of our experience. Australia has avoided recession since the pandemic largely due to a rapid increase in population. Individually, however, we're all worse off with per capita GDP sliding into reverse in four of the past five quarters .

Quantitative pleasing

It's impossible to overstate the significance of the Bank of Japan's recent interest rate decision.

Having battled deflation since 1999 – when it first sent interest rates to zero – its quest to vanquish constant price falls finally appears to have been won. Prices are now rising consistently for the first time in decades.

While the idea of cheaper prices sounds enticing, deflation is a disease that wreaks economic destruction. Why buy something now when it will be cheaper next week and even cheaper next month? Why not wait until next year?

But the battle has come at an enormous cost.

It was Japan in the late 1990s that pioneered the concept of Quantitative Easing, a form of money printing then considered radical by the rest of the world.

But when the Global Financial Crisis struck in 2008, America and Europe took the plunge. During the pandemic, everyone, including Australia, got on board.

It involves the central bank buying up government debt, to inject cash into the economy. So extreme was Japan that at one stage, the Bank of Japan owned most of the government bonds on issue. It was then forced to buy shares on the Tokyo Stock Exchange, to keep the stimulus rolling.

After decades of this, Japan boasts the biggest pile of debt in the developed world at a whopping 255 per cent of GDP. By contrast, Australia's gross debt sits at just 36.5 per cent of GDP .

How it unravels this will provide a masterclass for the rest of the developed world.

Even at rock bottom interest rates, almost 9 per cent of Japan's budget is spent on servicing its interest bill. So, it simply cannot afford to raise rates much further without crippling itself.

Housing and living costs. What crises?

It's difficult not to be captivated by the country and its people, given its rich history, incredible technology, stunning food and a culture that spans thousands of years.

That may help explain why Australians now are flocking to Japan even as our trade relationship has stagnated.

Once our biggest trading partner, in recent months, it has become the number one destination for Australians hitting the road.

Partly, that's due to a rapidly evolving shift in our perceptions. My parents' generation viewed Japan through the prism of war. My children's generation hold it in awe.

For all its economic woes, Japan has escaped the cost of living crisis that has swept most of the globe in the past two years. Similarly, it has avoided the housing affordability crisis that has afflicted most of the Western world.

Both issues are directly related to its aging and shrinking population. Older people spend less and save more. Fewer people take pressure off the housing market.

That's not the only positive. The shrinking workforce is also having an unexpected and beneficial impact on wages and society. Japanese are now working until much later in life with more than a third of all over-70s still in a job.

In addition, wages have begun to lift in the past 12 months with the biggest gain in 30 years finally flowing through to real wage rises.

Despite its travails, Japan remains the world's third-biggest economy and one of the globe's biggest investors, given the extent of its savings.

And like us, it has found itself wedged between China, its biggest trading partner, and America, its greatest ally.

Handling that delicate diplomatic issue all while forging a path back to prosperity will be no easy task. But it could be Japan that paves the way.

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The 'sandwich generation' faces pressure as the world ages — here are 3 tips to prevent burnout

People are living longer now than ever before. As medical technology advances and medicines become more effective, mortality rates have also fallen.

While this is a major success for humanity, signaling that our work to improve the quality of life has paid off in creating greater longevity, it leads to another problem: caregiver burnout.

Caregiving labor is expensive and unaffordable for many families. Additionally, in many Asian societies, it is commonly valued for families to keep elderly loved ones at home and personally care for them as they age.

"We have observed in clinical settings that these caregiving adults are at risk of caregiver burnout, and experience a sense of vulnerability as they realize they would also be going through an aging process in the next 20-30 years of their lives," John Wong, director of the National University of Singapore's Mind Science Center, told CNBC Make It .

The World Health Organization estimates that people over the age of 60 will be approximately 22% of the global population by 2050.

"The number of people aged 65 years or older worldwide is projected to more than double, rising from 761 million in 2021 to 1.6 billion in 2050," according to a 2023 report by the United Nations , adding that the population of people aged 80 and above is growing even faster.

Some Asian societies are leading the trend. 

"By 2050, roughly 40 percent of the populations of Hong Kong, South Korea and Japan are expected to be 65 and older," according to the World Economic Forum .

'Sandwich generation'

Along with people living longer lives, fertility rates have also fallen, leading to smaller nucleus families.

Not only will there be new challenges for the world's current systems and economies, it will also largely impact future generations.

"There's this tendency in the welfare state to sort of outsource the elderly care," Jan-Emmanuel De Neve, director of the Wellbeing Research Centre at Oxford University told CNBC Make It.

" That tends to lead to issues of isolation, elderly people feeling useless, whereas there's so much to offer the society and the younger generations."

Although home-care for the elderly improves their wellbeing, it can also place pressure on younger generations.

"As society responds to an aging population with increased care needs for frail seniors, the burden of care for the elderly is usually borne by the sandwich population," said Wong, who is also an associate professor at the Yong Loo Lin School of Medicine in NUS.

The so-called sandwich generation refers to middle-aged people who have elderly parents to care for, as well as their own children who are still dependent on them.

In addition to looking after their parents and children, both emotionally and financially, they also have to care for themselves while pursuing their careers.

The younger generations have to support their elderly parents or grandparents. If they also have their own young children, they would be squeezed as the 'sandwich generation.' Jialu Streeter Executive Director of the Stanford Institute for Economic Policy Research

"One major difference between the Baby Boomer vs the Millennials/Gen Z generation could also be the increasing emphasis and pressure to develop a personal career, realizing personal aspiration, ahead of the family needs," Wong said.

"This could create undue social pressure on the Millennials and Gen Z," he added.

Baby boomers refer to people born between 1946 to 1964. Millennials are those born between 1981 and 1996, while Generation Z are people born between 1997 to 2012, according to the Pew Research Center.

Preventing caregiver burnout

Here are 3 tips to help manage the pressure:

• Prepare ahead of time
• Have honest conversations with the family
• Don't forget self-care

In preparation for this time of life, people should look to have honest conversations with their family members.

"This would entail defining one's family value system, setting out personal goals, life aspirations, allocating and committing personal resources," Wong suggested.

He highlighted that setting boundaries are important, but parents and their children need to have these discussions ahead of time to prevent burnout.

Additionally, "plan to have honest conversations with family members, spouse/partners, to discuss how to share the caregiving tasks," said Jialu Streeter, executive director of the Stanford Institute for Economic Policy Research.

"It's very challenging, but don't forget to self-care. A lot of times, we think self-care is selfish. It's the very opposite. Only when we take good care of ourselves then we have the mental and physical capacity to take care of our loved ones," Streeter added.

Integrating the elderly in society

"The elderly don't necessarily have to be a burden on young or society," De Neve told CNBC. "For the well being of the elderly, we have to think very creatively and practically about ways of integrating them back into meaningful, useful ways of contributing to society."

De Neve suggested that younger generations and governments should think about solutions on how to reincorporate the elderly into society so that they stay active, healthy, and valuable members of society.

One suggestion is to keep nursery schools and elderly care homes in the same building.

"Think of all the benefits ... the widening of [the] horizons for the small kids, and at the same time, making the elderly feel useful as they see life blossoming through the eyes of a two year old," he added.

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Japan slips into a recession and loses its spot as the world’s third-largest economy

FILE - A sushi chef prepares a plate at the Toyosu Market Monday, Jan. 29, 2024, in Tokyo. Japan has slipped to the world’s fourth-largest economy as government data released Thursday, Feb. 14, 2024, showed it fell behind the size of Germany’s in 2023. (AP Photo/Eugene Hoshiko, File)

Commuters walk in a passageway during a rush hour at Shinagawa Station Wednesday, Feb. 14, 2024, in Tokyo. Japan has slipped to the world’s fourth-largest economy as government data released Thursday, Feb. 15, showed it fell behind the size of Germany’s in 2023.(AP Photo/Eugene Hoshiko)

Commuters walk in a passageway during a rush hour at Shinagawa Station Wednesday, Feb. 14, 2024, in Tokyo. Japan has slipped to the world’s fourth-largest economy as government data released Thursday, Feb. 15, showed it fell behind the size of Germany’s in 2023. (AP Photo/Eugene Hoshiko)

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TOKYO (AP) — Japan’s economy is now the world’s fourth-largest after it contracted in the last quarter of 2023 and fell behind Germany.

The government reported the economy shrank at an annual rate of 0.4% in October to December, according to Cabinet Office data on real GDP released Thursday, though it grew 1.9% for all of 2023. It contracted 2.9% in July-September. Two straight quarters of contraction are considered an indicator an economy is in a technical recession.

Japan’s economy was the second largest until 2010, when it was overtaken by China’s. Japan’s nominal GDP totaled $4.2 trillion last year, while Germany’s was $4.4 trillion, or $4.5 trillion, depending on the currency conversion.

A weaker Japanese yen was a key factor in the drop to fourth place, since comparisons of nominal GDP are in dollar terms. But Japan’s relative weakness also reflects a decline in its population and lagging productivity and competitiveness, economists say.

Real gross domestic product is a measure of the value of a nation’s products and services. The annual rate measures what would have happened if the quarterly rate lasted a year.

Japan was historically touted as “an economic miracle,” rising from the ashes of World War II to become the second largest economy after the U.S.. It kept that going through the 1970s and 1980s. But for most of the past 30 years the economy has grown only moderately at times, mainly remaining in the doldrums after the collapse of its financial bubble began in 1990.

Both the Japanese and German economies are powered by strong small and medium-size businesses with solid productivity.

Like Japan in the 1960s-1980s, for most of this century, Germany roared ahead, dominating global markets for high-end products like luxury cars and industrial machinery, selling so much to the rest of the world that half its economy ran on exports.

But its economy, one of the world’s worst performing last year, also contracted in the last quarter, by 0.3%.

Britain’s likewise contracted late last year. Britain reported Thursday that its economy entered a technical recession in October-December, shrinking 0.3% from the previous quarter. The quarterly decline followed a 0.1% fall in the previous three-month period.

As an island nation with relatively few foreign residents, Japan’s population has been shrinking and aging for years, while Germany’s has grown to nearly 85 million, as immigration helped to make up for a low birth rate.

The latest data reflect the realities of a weakening Japan and will likely result in Japan’s commanding a lesser presence in the world, said Tetsuji Okazaki, professor of economics at the University of Tokyo.

“Several years ago, Japan boasted a powerful auto sector, for instance. But with the advent of electric vehicles, even that advantage is shaken,” he said. Many factors have yet to play out, “But when looking ahead to the next couple of decades, the outlook for Japan is dim.”

The gap between developed countries and emerging nations is shrinking, with India likely to overtake Japan in nominal GDP in a few years.

The U.S. remains the world’s largest economy by far, with GDP at $27.94 trillion in 2023, while China’s was $17.5 trillion. India’s is about $3.7 trillion but growing at a sizzling rate of around 7%.

Immigration is one option for solving Japan’s labor shortage problem, but the country has been relatively unaccepting of foreign labor, except for temporary stays, prompting criticism about discrimination and a lack of diversity.

Robotics, another option, are gradually being deployed but not to the extent they can fully make up for the lack of workers.

Another key factor behind Japan’s sluggish growth is stagnating wages that have left households reluctant to spend. At the same time, businesses have been invested heavily in faster growing economies overseas instead of in the aging and shrinking home market.

Private consumption fell for three straight quarters last year and “growth is set to remain sluggish this year as the household savings rate has turned negative,” Marcel Thieliant of Capital Economics said in a commentary. “Our forecast is that GDP growth will slow from 1.9% in 2023 to around 0.5% this year.”

Yuri Kageyama is on X: https://twitter.com/yurikageyama