Japan demographics

The main questions are the effects of an aging population (1) on the economy, and (2) on the funding of national debt.

Note these statistics are only available sporadically and the page is rarely updated.


13 Aug 2014.

The population of those 65 or older is rising strongly while the population of those at a typical working age, 20-64, has peaked and is falling. The ratio of the former to the latter, known as the dependency ratio, is high and will continue to rise.

The most important consequence is that household savings, which used to fund a significant fraction of the government deficit, are unlikely to do so in the foreseeable future. In 2012 household savings were about 4 trillion yen, while the net government bond issuance this year is projected to be 41 trillion (see the MOF budget page). And because of the rising dependency ratio, the household savings rate is more likely to go down than up.

There is also a purely statistical consequence. Many moan about Japan's slow growth and blame policy mistakes, but growth per working person has actually been healthy, that is, slow growth is due to demographics, not policy.


13 Aug 2014. Data through 2014 (population) and 2012 (savings rate).

Here the population aged 20-64 is taken as indicative of those working, and the population of those 65+ is taken as indicative of those retired. The dependency ratio is obtained by dividing the latter by the former.


  • Population. See eStat population estimates for monthly data. The July monthly estimate is taken as the annual estimate.
  • Savings rate. Cabinet Office → System of National Accounts → Annual Report → Flow → under header Income and Outlay Accounts classified by Institutional Sectors → table Households (Including Private Unincorporated Enterprises) → Tab CY4b in the spreadsheet → Adjusted Savings Ratio (There is a long delay – the Flow series for 2009 was released on 24 Dec 2010)

See also

Clippings below were used in the construction of this page

Retirement at 60 to 65 is normal

7 Jan 2004. Japan Times.

“Raising retirement age eases, adds strains. KAHO SHIMIZU”

“Isomi Suzuki believes he is one of the lucky few to be able to continue his career even after reaching age 60, the common retirement age in Japan. …

What enables Suzuki to carry on in his career is Matsuya's 1998 extension of the mandatory retirement age from 60 to 65, a move taken by other companies, including Fuji Electric Co. and Nagoya Railroad Co. …

In April 2001, the government raised the pension age for corporate employees to 61. The age will be raised by a year every three years until it reaches 65 in 2013. …

The Health, Labor and Welfare Ministry has been trying to persuade firms to make 65 the mandatory retirement age in line with the gradual pension age hike, and is also urging companies to deal with the expected labor shortage in the near future. …

Atsushi Seike, a professor of commerce at Keio University, said the major reason behind the strong resistance by business to extend the employment period is personnel costs. …

“The mandatory retirement age has functioned as a way to adjust excess employment,” Seike said, adding that setting that age and ending seniority-based wages should be part of the same package.

The traditional practice of hiring new graduates, offering life-time employment coupled with seniority-based wages needed the mandatory retirement age as a cap to continuous salary hikes, he said.”

Reasons for the low birth rate

20 Nov 2010. Economist pi14.

“The dearth of births”

“Since the mid-1970s, when it became clear that the number of births was resolutely declining, Japanese governments have made efforts to encourage people to have more babies. But for all that they have increased child benefits and provided day-care centres in the past 30 years, the birth rate has remained stubbornly low. One reason is that in Japan, unlike in the West, marriage is still more or less a prerequisite for having children. Only 2% of births take place out of wedlock. And weddings cost a lot of money. The more elaborate sort may involve renting a chocolate-box “church” and hiring or buying at least three bridal outfits. The average cost of a Japanese wedding is about ¥3.2m ($40,000).

Having gone to all that trouble, married couples do, in fact, have an average of slightly more than two children, just above what is needed for births to exceed deaths. The trouble is that fewer and fewer people get married. Women wait ever longer and increasingly do not bother at all. According to the NIPSSR, six out of ten women in their mid- to late 20s, which used to be the peak child-bearing age, are still unwed. In 1970 the figure was two out of ten. And almost half the men between 30 and 34 were unmarried in 2005, more than three times as many as 30 years ago.

But the cost of weddings may be the least of the reasons why the Japanese are increasingly putting off marriage or avoiding it altogether. One weightier one is that employment rates among women have increased but private companies implicitly discourage mothers from returning to their old jobs. Toshiaki Tachibanaki, an economist who has written on inequality among Japanese women, finds that about 80% of female civil servants return to their old jobs after having children because they get reasonable maternity benefits and help with child care. But in private companies they are typically less well looked after, and only about a third go back to work.

So most women are forced to take low-paid irregular or part-time jobs after having children. NIPSSR figures show that the vast majority of working women aged 35-49 have jobs of that kind, earning ¥500,000-1.5m a year. Most men in the same age group work in regular jobs (with fringe benefits) and are paid ¥3m-6m.”

As expected, aging population is resulting in higher retirement benefits

20 Nov 2010. Economist pi11.

“Social insecurity”

Graph shows social security benefits, including both pension and medical, rising pretty steadily from about 14% or GDP in 1990 to a projected 26% in 2011. (Source: Ministry of Finance)