A Healthy Aging Society in Japan

Japan is well-known as one of the oldest countries in the world. While many people might be surprised by the longevity of its citizens, economists like us see challenges and problems to solve. Japan, an island nation often referred to as the land of the rising Sun, is rich in natural resources and marine life. Despite its challenging climate, which can decrease the population, Japan is ranked as having one of the oldest populations globally. One reason for the longevity of the Japanese is undoubtedly their nutritious diet. Japan has shocked the world by developing a healthy aging society through good dietary habits.

Promoting Well-being in Japan's Aging Population

In June 2018, I had the opportunity to attend Meiji University for a summer exchange program, as it partners with Chulalongkorn University. During my time in Tokyo, a bustling metropolitan city, I observed many elderly individuals actively participating in city life. My professor, who was in his seventies, lectured on this topic, prompting me to question why Japanese life expectancy is so high. In Thailand, it is rare to see people living past 100, yet in Japan, it is common to find centenarians who are still active. According to Marmot and Smith (1989), the longevity of the Japanese is attributed to a robust public welfare system and a nutritious diet. This essay will delve deeper into the population patterns concerning public welfare, which is considered a chronic issue.

Economic Implications

What are some reasons behind Japan's low GDP growth rate over the past decade? Upon examining data on social security taxation, it is evident that approximately 30% of income is collected as tax, compared to 25% a decade ago. Why does the government collect higher taxes? Social security is a primary revenue source for government spending on social welfare, public programs, and other benefits. Over the past ten years, government spending relative to GDP has reached 40%, placing a significant burden on taxpayers. Given Japan's demographic pattern, which is trending towards an aging society, the outcome may be worse than anticipated. In simpler terms, the birth rate is low, and the mortality rate is high, resulting in fewer newcomers to replace the labor force, while the current workforce transitions to an aging society.

Challenges for Future Generations

Due to intergenerational population patterns and taxation, future generations will face high tax rates due to a population decline over the past 50 years, which continues to decrease (Population ages 15-64 (% of total)). This tax situation implies that current workers must support the elderly by paying higher taxes, leaving the current and future generations worse off, while retirees enjoy leisure with government support. From my experiences in Japan, I learned that the cost of living is high, confirmed by my Japanese friends. Consequently, not only do domestic workers support themselves and their families, but they are also compelled to assist older strangers, with those aged 65 and above outnumbering the entire labor market.

Future Outlook

At this rate, it is expected that Japan's population will continue to shrink over the next 50 years due to the negative growth rate. This presents the chronic issue mentioned earlier: people are less likely to have children because of rising living costs and high taxes. As a result, disposable income is limited, creating a financial barrier to raising children. If policymakers and the government do not break this cycle, the negative birth rate trend will persist, further burdening the country. Additionally, Japan faces a substantial public debt, with tax revenue insufficient to support every elder, resulting in a long-term deficit in current spending.

Solutions and Strategies

On the bright side, Japan's prosperity is shadowed by rising suicide rates due to overwork and stress. To revive Japan's glory, like resurrecting the fallen Samurai to become a great Shogun Emperor again, significant measures must be taken. Strategies to counter the aging society include financial incentives for having more children, reforming pension fund ratios, or extending the retirement age. Given Japan's high living costs, raising a child to adulthood requires substantial financing. If the government implements financial support as in-kind educational support, it could directly impact population growth and develop skilled labor to replace the current workforce. Alternatively, extending the retirement age to 70 could increase labor force participation, though this may result in less competitive elders due to physical decline.

Conclusion

In conclusion, while Japan is effectively maintaining its population, it is a time bomb for future generations and a challenge for the country to manage its human capital efficiently. At some point, the cycle must be broken to set the nation on a path to a brighter future; otherwise, this path could lead to despair and economic collapse.

References

• Marmot, M., & Smith, G. D. (1989). Why are the Japanese living longer? BMJ (Clinical Research Ed.), 299(6715), 1547–1551.