Age-old problem for Japan as births fall and economy shrinks

This year, Japan’s national debt topped 10 million yen per capita for the first time – a staggering total of 1.28 quadrillion yen (£7.5 trillion).

At two-and-a-half times the size of the country’s GDP, it’s the world’s highest debt-to-GDP ratio, more than twice the UK’s.

At the same time, the birth rate hit its lowest level since records began while the elderly population hit an all-time high with nearly 20 million people aged over 75.

With a median age of 48.6 years, Japan’s population is the world’s oldest and boasts the world’s longest life expectancy. In September, Japan’s number of centenarians – the world’s highest percentage – topped 90,000.

“Since 1950, Japanese longevity has been steadily climbing,” says Rikiya Matsukura, a demographic researcher at Nihon University, Tokyo. “Life expectancy at 55 has grown from another 20 years then to 33 years now.”

Matsukura is among Japanese experts seeking solutions to a phenomenon economists call a “demographic time bomb.”

The International Monetary Fund estimates Japan’s economic growth will decline by 0.8% each year over the next 40 years and has warned other Asian economies to beware of “growing old before becoming rich.”

In 2016, the population dropped for the first time and is still falling, along with the fertility rate – now 1.3 children per woman. In the first half of 2022, just 384,942 babies were born – 20,000 fewer than in the same period the previous year and a drop that Health Minister Katsunobo Kato said “significantly impacts the entire society and economy.”

Japan’s potential labour force sits at 59% – the lowest level among the G7 countries. A gloomy 2019 forecast by Japan’s Financial Services Agency warned that thanks to the growing imbalance between pension contributors and beneficiaries, a typical elderly couple will need to top up their state pension by 20 million yen (around £118,000) of savings to sustain their retirement years, and this seems certain to rise.

Taka Izumi, 51, a Tokyo hair salon owner, fears for his future. “You have to pay the pension until 65, and people are starting not to pay because they fear they won’t receive any payments when they’re older,” he says.

“I’m not sure I will get any money in the future. I might not be able to retire. If I’m healthy maybe I can work through my 70s.”

The prospect of caring for elderly parents weighs heavily on Izumi’s generation. As the oldest son, this traditional duty will fall upon him. “I have no choice,” he says. “I just try not to think about it.”

Families are also shrinking, says Rikiya Matsukura. “Many Japanese feel they are not economically secure enough to marry,” he says. Tokyo University sociologist Masahiro Yamada has documented the connection between Japan’s economics and its marital woes for decades and says he is “very pessimistic”.

“The population of unmarried people has risen since 1975. Last year there were only about 500,000 marriages,” he says. “Two years ago, there were close to 600,000. According to the last census, 51.9% of males and 38.5% of females between 30 and 34 have never married.”

In Yamada’s research, half of Japanese university students said they had never had sex, and confessed little inclination to do so.

While certainly a response to the prevailing economic conditions, this trend also has its roots in culturally ingrained attitudes, he says.

“For Japanese people, marriage is more about keeping yourself economically viable than having a sexual or romantic relationship,” he says.

During Japan’s extraordinary economic postwar growth, women were traditionally homemakers while men worked long hours in secure jobs. “There is still a mindset that the husband will provide,” says Yamada.

Now, he says, men with poor financial prospects are left on the shelf while others are reluctant to take on the financial burden of a family.

Behind these numbers lie some troubling trends such as the rise in what Yamada calls “parasite singles” – young people who continue to live at home, dependent on their parents, well into adulthood. In extreme cases they become “hikikomori” – social recluses who remove themselves from society. Japan’s Cabinet Office estimates there could be as many as 1.5 million people living this way, and the country’s foremost expert on the phenomenon, psychiatrist Tamaki Saito, believes there could be two million.

None of this bodes well for the welfare of those older Japanese. Once the envy of the world, their longevity now seems more curse than blessing.

Between 2005 and 2015, the number of arrests involving people 65 years and older rose from five to 20%. Most are petty crimes such as shoplifting and theft, and Japan’s National Police Agency attributes the geriatric crime wave to economic hardship.

Sadder still is the rise in “ubasute” or “granny dumping”, where families abandon ailing elderly relatives at hospitals or charity offices, and the heartbreaking phenomenon of “kodokushi”, meaning “lonely deaths” of seniors living alone.

These are scenarios far from the affluent image of Japan. But many hope to find solutions from which other countries facing demographic challenges could benefit.

For Rikiya Matsukura, answers lie in the untapped potential of those older Japanese. “Older people are a big potential asset in the workforce,” he says, pointing to studies showing workers in their 60s are still in good health and keen to continue. This “silver dividend,” he says, could generate up to 6% of Japan’s GDP.

To this end, maintaining good health will become more crucial than ever and could create vibrant new economies, says Sachiaki Takamiya, a life coach who relocated from Tokyo to rural Shiga to follow a sustainable lifestyle.

“Our focus needs to be on healthspan rather than lifespan,” he says. “I’m 60 and will probably have to continue working for at least another 20, even 30 years. To do this you need a foundation of good health.”

Small-scale farming, even just enough for self-sufficiency, could benefit older people and the economy, he says. “In Japan we have a food shortage and we need more people who grow any kind of food.”

Many of those sprightly centenarians in Japan’s Blue Zones (wellbeing hotspots) practise gardening, he adds. “This provides ‘ikigai’ (sense of purpose) which improves wellbeing.”

“Improving healthspan can create other new jobs and industries,” he says. “An older person could become a health coach or a yoga instructor.

“Japan has a long tradition of natural health and I think we can build on this to become a role model for other countries. In a way, it is a great opportunity to change the social structure.”