SEARCH

Research

Lessons from the Future: Boosting Growth in an Aging Japan

The world is growing older, and demographic decline will change the fabric of societies across Asia, presenting challenges but also opportunities to remake society for the better. Medicine and health care are among the most important of these challenges and opportunities. Health and medical issues are coming to the fore not only in Japan but, with newfound force, worldwide.

Using Japan as a case, this briefing examines how countries respond to the demographic imperative to make smarter use of labor, make capital work harder, and use technology to increase productivity, in order to see that growing old and rich is a pleasure, not a burden, for individuals and their society.

Japan will see its population shrink to a degree that nowhere in the world has ever experienced outside of war or disease. By 2065, less than two generations from now, the country’s population is expected to shrink by one-third, to 88 million from 126 million today. This briefing explores how Japan can make better use of its labor, capital, and productivity. It also asks what a new social contract for Japan would look like.

Fewer people means lower consumption growth, fewer workers, and less funding for pensions, healthcare, and other social services. There is understandable fear about the burden on a shrinking number of younger workers forced to shoulder pension and health care costs for a growing number of elderly people. But this dystopian view doesn’t consider the potential afforded by well-educated and capable older people in a wealthy country at a time of rapidly changing technological possibilities. This briefing argues that with the right social, political, and economic choices, a rich and rapidly aging Japan can pioneer a new social contract to protect the old, the infirm, the unlucky, and even the inept—one that that reflects the possibilities that a wealthy, technologically adept country enjoys. With most other rich and even middle-income countries also facing a demographic cliff, the world would do well to watch Japan.

Lessons from the Future: Boosting Growth in an Aging Japan (PDF)