22% of Japanese people are over 65. And that proportion is expected to rise to 40 per cent by 2060. And to top it off there is a gender imbalance too! If China is running out of wives, Japan is running out of husbands! Japan is ageing and feminising at the same time.
So why did this happen? Is it the low birth rate, the low female participation rate, low immigration or is it a combination of all these factors? Probably a combination but it’s hard for an economy to grow if it eschews immigration.
So what are the consequences of an ageing population for the Japanese economy? It means fewer people of working age to pay taxes to pay for pensions. Hence the need for fiscal reform under ‘Abenomics” named after Japanese Prime Minister Shinzo Abe. It also means a large pool of savings, to invest in japan and overseas. It also means the emptying on small rural towns that no longer need schools as families drift to the larger Japanese cities. With no immigration it’s important for Abenomics to help raise the female labour force participation rate too.
There are also consequences for trade and tourism. We already see women making family holiday decisions now – more recreation and cultural activities than the 3 day golf and karaoke rampages of the salary men in the 80s. There’s also great demand for health and well ness products with Australian companies like Blackmores vitamins and Janesce skin care doing very well in the health conscious Japanese market.
This article was originally published in the Herald Sun
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