Japan faces the challenge of an aging population

Japan is having to solve the problem of an aging population. Illustration photo

According to data released by the Ministry of Internal Affairs and Communications, the proportion of elderly people in Japan defined as 65 years old or older reached a record high of 36.17 million as of September 2023, up 300,000 from a year earlier, accounting for 29.1% of the population and the highest rate in the world. Japan is not only facing a population crisis but also concerns about its growing elderly population. The National Institute of Population and Social Security Research predicts that the elderly in Japan will account for 35.3% by 2040.

Japan is not only facing a population crisis but also a growing concern about its aging population. Compared to other developed countries, Japan has also had one of the lowest birth rates in Asia over the past few decades, with the birth rate falling sharply to 1.3 births per woman, far below the 2.1 needed to maintain a stable population without immigration. This, in turn, has led to a shrinking workforce, which could impact funding for pensions and health care as demand from the aging population increases. The Land of the Rising Sun also has one of the highest life expectancies in the world , contributing to the growing aging population.

To cope with a growing labor shortage and in the hope of reviving the sluggish economy , the Japanese government has encouraged more elderly people and stay-at-home mothers to re-enter the workforce. To some extent, the message has worked, with Japan now boasting a record 9.12 million elderly workers, a figure that has risen for 19 consecutive years. The internal affairs ministry also said that workers aged 65 and over now account for more than 13% of the country’s workforce. The figures put Japan’s employment rate among the highest among major economies. But even encouraging older workers is not enough to offset the economic and social impact of the demographic crisis, with Prime Minister Fumio Kishida warning that Japan is “on the brink of being unable to maintain social functions.” He added that childcare support was the government's “most important policy” and that tackling the problem “simply cannot wait”.

It can be seen that the problem of population aging is posing new challenges to the pace of life, policies and even strategies of this country. Specifically, the subsidy program will cover 70% - 100% of the cost of elderly care, depending on the income of the beneficiary. But this system is also in crisis due to a shortage of human resources. The Japanese government estimates that the country will need 700,000 more people by 2040. Proposed solutions include raising wages, recruiting retirees and volunteers, or relying on robots. But even so, Japan's population continues to age. Meanwhile, welfare costs are escalating. Social security costs, including public health care, long-term care and pensions, have tripled from 1990 to 2022, entirely paid for by the government. “The welfare system we provide has many advantages and people are used to it,” said Hirotaka Unami, a senior aide to Prime Minister Fumio Kishimoto. “To maintain that, we have to restore the balance between benefits and burdens. Otherwise, the welfare system is not sustainable.”

Not only Japan, but also China, South Korea, and Singapore are experiencing similar crises. These countries are trying to encourage young people to have more children in the face of rising living costs and social discontent.

THUC LINH

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