Japan’s Population Decline: Addressing the Need for Supporting Families and the Economy

Melanie Urena Lara

Staff Writer

In a world once concerned with overpopulation, an unexpected threat has emerged: population decline. With some nations decreasing their inclination to have children—whether due to high living costs or demographic changes, countries like Japan are struggling to keep themselves afloat. This demographic crisis requires urgent and targeted reforms, as failure to act will further undermine Japan’s social systems and economy. Their rapidly aging population, combined with a dwindling birth rate, is why Japan must establish policies that support working families and create more employment opportunities to secure a stable future. 

Due to Japan’s low birth rate, the workforce has been reduced, creating widespread shortages across industries like caregiving for the elderly. Developers are exploring technological solutions through the construction of robots that can help perform daily tasks. According to a Reuters report, “The number of babies born in 2024 fell for a ninth year, by 5% to a record low 720,988, data from Japan’s health ministry showed on Thursday. The nursing sector, meanwhile, is struggling to fill jobs.” The concerns surrounding the drop in babies being born are directly connected to the growing difficulty of sustaining a generation of working-age individuals. 

AI-robots, such as the humanoid AIREC, are depictions of Japan’s attempts to substitute human presence with technological machinery. While these robots do aid, they are limited to mimicking basic actions. A caregiver worker at a Zenkoukai facility named Takaki Ito points out to Reuters, “But I don’t think robots can understand everything about nursing care.” While technologically advanced, there is no real connection between robots and the elderly. Traditional caregiving weakens when human interaction is replaced, and Japan’s society turns emotionally disconnected as well. The implications of a population decline in Japan also have an impact on economic growth. A hindrance appears within productive capacity since few people are entering the labor force. Productivity is not going to reach maximum levels if young people do not actively work.

The International Monetary Fund asserts that, “A recent IMF staff paper estimates that Japan’s economic growth will decline by 0.8 percentage points on average each year over the next 40 years due to demographics alone.” This 2020 paper is an early warning that the country’s economy is tied to shifts in demographics. With fewer people entering the labor force, companies have a harder time keeping operations at full capacity, leading to decreased industrial output. 

The IMF further stresses the importance of trying to boost Japan’s birth rate by discussing the burden it will have on the nation’s public finances: spending on pensions, for instance, will rise, while the shrinking tax base makes it challenging to fund these expenses. Interest rates are additionally affected, since, as Japan’s aging population is close to retirement, individuals save more for their futures, which reduces the overall investment activity. 

The World Economic Forum hops onto this issue by sharing important statistical findings, “..only 35% of companies prioritize workers aged over 55.” Many older Japanese citizens remain underutilized, despite many older people being capable of working. This increases labor shortages in Japan, as an entire demographic group remains sidelined, which highlights the necessity for policies to ensure future stability. 

Another critical issue would be Japan’s high cost of living. Factors such as education and housing have discouraged young people from having children. The fear of not properly providing for a child, as well as the fact that many jobs do not accommodate child-rearing, causes young couples to delay or opt out of parenthood, as expressed by The Mainichi. Balancing work, family responsibilities, and expenses becomes a struggle with minimal flexibility and limited support systems.

To address the situation, people like Chief Cabinet Secretary Yoshimasa Hayashi tell The Associated Press, “the government will steadily pursue expanded childcare programs and subsidies for childrearing households, while promoting salary increase and support for matchmaking effort.” This policy enables working families to feel supported as the financial aspects of parenthood ease. On top of this, it serves as a push for individuals to seek employment due to salary increases and transforming child-rearing into a shared societal duty. 

Fox News illustrates this support in action by stating how, in January 2023, Tokyo Governor Yuriko Koike presented a reform of 5,000 Yen (38 USD) for each child aged eighteen or younger living in Tokyo. Even though the amount seems small, it represents steps taken to show action. New policies symbolize the government’s growing awareness of demographic changes, economic downfalls, and costly lifestyles. Rather than accepting robots replacing humans, tackling the aforementioned issues is a proactive approach towards Japan’s declining population, making room for a brighter future. 

Image courtesy of Getty Images.