Monday, March 22, 2010

Life After Japanese

Not breaking news, but I wanted to mention that Japan’s population is shrinking. This is hardly unique in the world, since a number of other countries are also suffering from population decline, mainly in Eastern Europe. What makes Japan different and has demographers all over the world (all 25 of them) drooling in anticipation, is that they were expecting this, and there is really isn’t much Japan can do to avoid a dramatic depopulation in this century on a scale not seen since the bubonic plague ravaged Europe in the 1300s.

Here are the projections. It’s a really great graph, so click on it, put it in a big window and take some time to look it over.

The estimate is that by the year 2105, the population in Japan will have plunged from its current 127 million to around 45 million. A 65% drop for those keeping score. The action has only gotten started. Last year, the population decline was a modest 75,000, but by the end of this decade the yearly decline should be in the 500,000-1,000,000 range.

Driving the pop- drop is a fertility rate that has been in a steady decline for about 35 years, when it slipped beneath the “replacement rate” of 2.1 births per woman. It currently stands at 1.34, but even if it were to rise again, population decline would still occur since there are fewer and fewer women of childbearing age.

The social reasons behind the fall in fertility are basically that Japanese women don’t want to get married and much less have children. And who can blame them as one Internet poster put it:

“Fewer Japanese women having babies because they don't want to get married to childish Japanese men. Also, babies are expensive, and why bring a child into a world with a looming threat of Godzilla?”

Working women come home after 12- hour workdays to wait on their husbands and kids. Grandparents could babysit, if they weren’t busy taking care of their own parents.

For years, the central and local governments have been extending financial incentives for women to procreate. But you have to question the commitment when it wasn’t until late 2008 that childbirth was even covered by medical insurance (it’s not an illness).

Naturally, not everybody sees depopulation as a bad thing. Japan is still one of the more densely populated countries in the world and when they sought to “reach out” into the world for a little elbow room, the results weren’t pretty.
Still, the process is going to leave the country with a disproportionate number of elderly, and many are worried about that.

Immigration has been the answer for other societies in this pickle. But the Japanese seem to love their monoethnicity and a massive immigration program is unlikely to garner popular support.

Cruel and insensitive internet posters have suggested remedies such as subjecting Japanese males to “tenderization”, by forcing them to watch Sandra Bullock romantic comedy marathons Or spiking the water supply with ExtenZe. Very funny, guys.

Why am I blogging about this? It’s interesting and something to be considered when investing. When Japan’s population is headed for a fall off a cliff, one can hardly expect the Nikkei to bounce back to its 1989 highs (almost 40,000 then, it’s standing at 10,800 now). I know I’ll think twice about buying Toyota stock. (/Investment Theme Justification)

Rural Japan is already feeling the effects of depopulation. If you’re into this kind of thing, here’s a fine blog called “Spike Japan”, depicting the desolation setting in on the countryside. Great depressing stuff.
It’s almost like a preview from the series “Life after Humans.”


  1. ...
    rooling in anticipation, is that they were expecting this, and there is really isn’t much Japan can do to avoid a dramatic depopulation

    really??? how about ##ucking more ??


  2. I would love to move my family of 5 & live in Japanese country side if the culture isn't so mono ethnic... The health care cost is so much more reasonable than in US for the citizens & food & the sceneries of the country sides are simply splendid.

  3. The Japanese have tripled child benefits since 2007 in an attempt to get the horse back in the stable. But it'll take a long time for the effects to kick in.

    Japan is a fascinating control. All over Western Europe (and to a lesser extent the States) the natives have discovered that there are more fun things to do in life than raise children. But the existence of a welfare state is predicated on there being sufficient taxpayers to keep paying for tax recipients - and healthcare for the elderly is very expensive.

    So France and Holland import North Africans, Germany imports Turks and the UK imports Bangladeshis, both to boost the economy and to have the babies the locals can't be bothered to have.

    How this will work out remains to be seen, but it contrasts starkly with Japan's "we'll do it ourselves" attitude.

  4. All growth based economies will ultimately end in disaster, for the simple reason that the earth is finite in extent and growth cannot continue indefinitely. Western nations using immigration to prop up population face a future not unlike Rwanda at worst, or Hati at best, where people have exceeded the economic carrying capacity of their society

    The Japanese are showing us a way out of that nightmare. I hope the West can wake up from its politically correct stupor and listen. It is the Japanese way, or nightmarish chaos, but the human population must receed.

  5. Interesting. However, the Nikkei includes world class players that derive most of their sales and profits from outside Japan (Honda,Ajinomoto, Asahi, kikkoman, Mitsubishi, and yes Toyota,Sony, Nintendo among 200 more). Several of those companies are truly multinational and multicultural, they just happen to be listed in Tokyo.

    I think that the Nikkei could rise substantially. After all, its been trading within the current range for the last 20 years!!!

  6. Excellent graphics. Congratulations

    Japan's population decreases rapidly.
    If the population it's in decline around the world, will can relieve the problem of employment

    towards 2050 yr


    I have used here your graphic

  7. Kodak might yet succeed in transitioning to the digital photography era. It is currently producing the full frame sensors for the very high end Leica cameras, with excellent results. Of course this represents only a small level of revenues.

  8. you can never really know with assurance what the fertility rate will be in five, ten, or twenty years from now. so, you have a relatively good idea what the population over 40 will be in 2050, but it's hard to predict the population under 40 in 2050. Japanese women could start having more babies, the fertility rate could rise to 1.5 or 1.7 or even 2.1 again. these are possibilities. the population will decline of course but at some point it will stop declining, i find it hard to believe that the population will dwindle down to two people and then zero people.

  9. Absolutely true, Brad. The projections, however, are not mine, but of the Japanese Ministry of Internal Affairs. I'm not sure what their projected fertility rate is, but I do think it trends up a bit towards the end.

    You can't be sure of projections, but you do a better certainty of the numbers that are closer. I'd say that population decline is a given for the next decade or two. After that, we'll see.