Wednesday, November 21, 2007

Population Decline

It's been all over the news lately that Japan's population is now stagnant and expected to shrink over the next generation or so. The immediate reason is a low birth rate - the fertility rate has hovered at around 1.3 since 2000 - rather than high death rate or significant emigration. And the reasons for the low fertility rate are grounded in the disconnect between the traditional norms of official society on one hand, and the realities of modern life for people - and especially women - on the other.

As far as child rearing, the society is organized around the idea of the mother working at or close to home, with nearby or live-in grandparents as extra support. Meanwhile the father works farther afield (literally for farmers, and career workplace for others), earning most of the needed funds for supporting the family. Children cost a lot of resources of course, but were the main "retirement benefit"; they'd be taking you in and supporting you in your old age. And as an aside, this supposed family structure forms the basis for the career "salaryman" as well; the punishing office hours presume a stay-at-home wife to provide constant ground service and support.

But society doesn't look like this anymore. On one hand, the kind of stable solid-income employment needed for a single person to support a family is becoming rarer; all the increase in employment figures here has been in temporary positions and part-time work, while the famed "lifetime employment" positions have been declining. The new kind of jobs do not pay as well, and are nowhere as secure as real full-time work. So having two incomes is becoming more important for more families.

On the other hand the work opportunities for women have steadily improved, and young women especially expect to be able to have a career and an independent income. And more young people are embracing the uncertainties of the temp workplace over long-term employment in a conservative company with excruciatingly long hours and perhaps weeks without seeing their families.

But those career opportunities and flexibility is not supported by a society that still views the traditional setup as the norm. Child care - if available at all - is very expensive, and there is very little in the way of child care leave, sick leave for children, or indeed a right to keep your job once you marry or have children.

Also, single households are becoming more and more common. The reasons vary but are a combination of more people studying at university; lack of funds to move away from parents household and together with somebody; or just an unwillingness to throw away the freedoms of single life to comply with the strict societal demands accompanying cohabitation or marriage. And while being a single parent is a daunting task anywhere, it is all but impossible in Japan.

The attitude from governmental Japan so far ranges from denial to outright hostility towards the idea of any kind of nontraditional family circumstances. A year or so ago, the minister of health referred to women as "birth giving machines" and paternity laws still refuse to accept DNA testing as definitive since, in the view of conservatives, it would undermine public morals (How? Beats me). For children born within 300 days after a divorce they can end up in a no-mans-land where they are not recognized as full citizens and cannot get passports or other essential services.

The end result is that people are choosing to have fewer children; or they have their children later (which of course leads to declining population as well); or may in some cases decide against having children altogether.

Japan is not alone in this trend. Italy is grappling with low birthrate for very similar reasons - a conservative societal structure out of step with the more open, changing and economically uncertain reality. Societies that are not grappling with this have either gone through this stage in one way or another (my native Sweden would be one example, but many current first-world countries would qualify) or have yet to encounter this dissociation (again, any number of societies would qualify).

A lower population is by itself no danger to Japan in general or to rural Japan in particular. Population predictions (see this article for a summary and really good links) for 2050 puts the population at somewhere between 90-110 million people versus about 127 million today. But as recently as 1960, the total population of Japan stood at less than 95 million (lots of stats here). For most of Japans history, including much of the past century, it has had a substantially smaller population than today - and managed a thriving economy and lively countryside just fine. How low a population could you have? Sweden is about the same size as Japan - around 20% larger, in fact - and has about 9 million inhabitants. It manages to have a thriving high-value export economy and standard of living right up at the top along with Japan.

Economically, fewer people means less economic output. But as far as living standards go, this is irrelevant; it's economic output per person that matters. And of course with a smaller population you have fewer people to share the economic wealth, as Scandinavian countries give example of. Yes, it will mean that Japans economic clout out in the world shrinks, but that is not really a societal problem. Most countries have no problem not being among the top ten economies of the world, and the public - unlike status-seeking politicians - can probably take that loss of status with equanimity.

While having fewer people than the present is not a problem, having the population change rapidly is. Whether population grows or shrinks, any society will have to struggle with keeping up. Crowded schools and insufficient number of teachers during child boom years; empty schools and redundant teachers now. Population changes are slow, but so are understandably large-scale infrastructure changes. And just like managing population growth is all about slowing it enough for the society to keep up, so is managing a decline. As long as the change is slow enough for services and planning to keep up, things will be fine. If not, you'll face growing or shrinking pains until it does.

Along with the population decline comes an aging population. And this can be serious if not handled correctly. Much of the reason for it is due to people living longer, though, not just the decline of young people, and it is a general problem Japan shares with many other countries (Sweden included). In a way it's a good problem to have - it means people are living a lot longer after all. There's two problems with an older population, both related to retirement. The first is that Japan - like a number of countries, but unlike Sweden - still has a pension system where the current workers pay for the current retirees. It's a pyramid scheme that depends on having a steadily increasing pool of new payers coming in at the bottom. That system was usually set up at a time when you had perhaps three or four working people for each retiree, and it breaks down when the proportion is closer to 1.5 workers per retiree as is now the case.

In the case of Sweden (I'm from Sweden; it's the country I know well, bear with me) we used to have a similar system, but a fairly severe financial crisis in the 90's gave the impetus needed to reform it into a system where each retiree is paying for themselves. Your retirement is thus not fixed but what you receive depends on how much money you've paid in and how well the economy (and thus the pension investments) have grown during the years. The connection to the long-term economy is thus made clear, and you aren't nearly as dependent on demographics as in the old system. That kind of change again needs a crisis to effectuate though, and there hasn't been a sufficient one here yet.

The second issue is the pension age itself. In short, 60 is the new 40. The pension age in most systems (about 60-65 in almost all countries) was selected early last century, at a time when 65 was old, and most work was literally back-breaking. Those people who even managed to reach retirement age were generally worn down, in poor health and could normally not expect all that many years of retirement. Today is very different. Your average life expectancy is up into the late seventies (and is of course even higher for the cohorts actually reaching retirement age). Many people in professions that allow you to retire at will, like physicians, researchers and artisans choose to work far up into the 70's and it's becoming more and more common for retirees to launch "second careers" to capitalize on their knowledge or to do something related to their interests.

The problem is not that people are getting older, but that people aren't working longer as they do. I've seen a figure of 69 years as a retirement age as the cutoff for basically solving the retirement crisis in Japan. That might just shuffle the problem ahead another generation, though, as people continue to get older. Perhaps connect the retirement age to cohort life expectancy would be more prudent - and fairer too.

But this is all "easy" problems; easy in the sense that the proximate causes are known, as are the solutions - you even have a good sampling of other societies you can study to find out the anticipated effect of various approaches. The only thing lacking (severely lacking, in the case of the LDP) is political will to actually implement solutions they see as distasteful and socially and morally bankrupt; and yes, to LDP hardliners women with a career qualifies as distasteful - to a fair number of them, female suffrage undoubtedly does. I expect political Japan to come around eventually but it probably needs a political crisis moment of some sort, and a gradual decline doesn't offer one naturally. Having the LDP lose the lower house to DPJ at some point would qualify, I think, or an internal LDP scandal or even party split between the mainline conservatives and the far right.

So what of the decline of rural Japan? The population of Japan peaked last year; up until a year or two ago it was still slowly increasing. By contrast, the countryside depopulation has been going on for well over twenty years now, and perhaps longer. The countryside was more vibrant and alive in 1960 (with, as we saw, a far smaller countrywide population) than today. The rural depopulation has been progressing even as the total population has still been increasing. Population growth is thus not a major factor; it will tend to affect the rate of change, of course, but does not actually determine the fate of the countryside.

Population size change is not a driving factor, but what about the aging of Japan? After all, rural areas have not lost people equally. As communities shrink it is disproportionally the young that leave and the old that stay, making the countryside not just smaller but grayer as well. With fewer young people you get fewer children and with more old people you get higher health and retirement costs with fewer workers. It becomes an exaggerated over-the-top version of Japanese population change, with every problem blown up to caricature size. But the reason for that is not population size, but population movement and specifically urbanization, the subject of the next post.

2 comments:

Miguel C said...

Hej Janne,

I've read your post with great interest, while I compare your description of Japan with the situation in my own country, Spain, which also has a similar birth decline. In our case it has been offset by inmigration (which brings its own set of problem), but the countryside, especially in the heartland, is in severe danger of depopulation.
I am looking forward to your next post...

Take care,

/Miguel

Janne Morén said...

Yes, Spain is another example, as is for instance Germany. In another decade or two I think you can add Mexico and several Central- and South American states to that list as well. Italy is along with Japan the one most severely hit and most well-known.

Note how it is precisely the dissociation between a conservative society and liberal reality that seems to be a major factor. Largely non-religious and overall culturally liberal northern European states have dodged this bullet (or more accurately went through this in an earlier era), while conservative southern European states have not.

There is also, as you mention, the mitigating factor of immigration. Without it, Italy and Spain would be looking at a far worse crisis than now, and my home country of Sweden would not be growing as it is without heavy immigration.

The challenge in Japan now is where to find working people during the transition to a smaller population (while a smaller population is fine, fast changes in population is a big problem). One part to that answer is, as I wrote, to make it easy for women to participate in the workplace on equal terms with men while at the same time making it feasible to have and raise children. The other - necessary - part is immigration.

But all parts of the solution is viewed with suspicion by many in the public, and is completely anathema to the conservatives in government. A fair number of those really do prefer a (fictional) Japan dwindling to zero over "polluting" the country with foreigners, or having women with equal status to men. This is after all the kind of country where the knee-jerk reaction of police is to look for suspicious foreigners whenever a crime has happened. I'm afraid Japan as a society is going to suffer a lot worse effects over the population change than it needed to, just because the resistance towards necessary change is so high.

Spain is a lot better off, I think. You're fairly open to immigration and emigration and you're part of the EU. That will have the effect of blunting the side effects of population change a lot. I'm working on my next post where I'll argue that the countryside decline is inevitable and unstoppable (bad), but will not lead to complete depopulation (good). I'll get there soon; as you may notice I have a really hard time keeping things short.