Japan: On the Verge of Societal Collapse

(January 2023) Japan is expected to face harsh demographic headwinds throughout the coming decades. According to estimates by Japanese prime minister Fumio Kishida number of birth in Japan dropped below 800,000 in 2022 which is inline with the UN estimates of 815,000 births. 

• Throughout the 1970s Japan experienced nearly 2 million births per year. In 2022 number of births decreased to 800 thousands. According to the UN World Population Prospects outlook population of Japan will decrease from 124 million to 73 million people in 2100 in medium scenario and to 50 million people in low scenario.
• Low birthrates coupled with population aging created a population pyramid with growing share of elderly population. In 2021 the share of population ages 65+ increased to 29%. Only Monaco has a higher proportion of residents 65 and older. Old age dependancy ratio in Japan (which is the ratio of population ages 65+ to working age population 15-64) topped 50 in 2021. This means that they are roughly 51 dependents for every 100 people of working age. Today’s high dependency rate undermines Japan’s economic growth.
• Low immigration has hampered Japan’s ability to elevate its lagging birth rate. Between 1950 and 2022 the net migration rate in Japan did not rise above 1.5 migrants per 1000 population compared to an average of 4 net incoming migrants per 1000 population per year in the US.
• In 2022, Japan had a fertility rate of 1.34 children born to each woman. According to the UN long-term projections fertility rate in Japan will unlikely increase back to 2.1 needed to stabilise the population.