Aging Population In Japan

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Japan: The negative effects of the ageing population on economic growth Over the past couple of decades, there has been a shift from worrying about overpopulation to the worry about ageing population. Japan is set to continue consisting of oldest population on average in the world for decades to come. There are many potential effects that this state of the population can have on society and economy. The one that will be analyzed throughout this paper are the detrimental effects of the Japanese ageing population on its economic growth. According to Timothy F. McCarthy’s The Safe Investor, there exist five classifications of countries on the base of maturity. These sets of countries are frontier countries, emerging growth countries, growth…show more content…
According to the National Institute of Population and Social Security Research, through the past and present evaluations and future predictions of the population trends in Japan, a trend can be observed. There has been a movement in the fabric of the population towards higher percentage of the population becoming members of the elderly section, that is, those above the age of 65. Those of 65 years of age and above are no longer in the workforce, thus do not produce any economic output, but consume resources for which they pay with money received from pensions through the governmental support. (NIPSSR-PP, 2017) Those people, nevertheless, have worked throughout their lives and paid taxes to the government which enables them to receive a proportionate support. With how the population fabric has been changing, things might get more complicated, nonetheless. As seen in the Figures 2, 3 and 4, the trend is quite telling in predicting even higher percentage of the Japanese population being part of the elderly in the…show more content…
This dependency requires balance to work at a sustainable level. The future might not hold views on the balance that positively. As the researchers of the National Institute of Population and Social Security Research put it, “The old-age dependency ratio (the percentage of the old-age population relative to the population of the working-age group) based on the medium-fertility projection is projected to increase from 36.1 (that is, 2.8 workers supporting one senior resident on average) as of 2010 to 50.2 (two workers supporting one senior resident) by 2022, and eventually reach 78.4 (only 1.3 workers supporting one senior resident) by 2060.” (NIPSSR-ADR, 2012) To set up an example: If the required amount of money for the elderly person was set at $1000 per month, in 2010 each worker would contribute 357$, in 2022 each would have to give $500 and in the predicted future of the year 2060, each working person would have to contribute $769 dollars to sustain the living standards of the elderly

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