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The Declining Birthrate in Japan
By Takashi OshiO, kOBe UniversiTy
J apan has entered an age of full-
fledged population decline. The
nation’s total fertility rate, which
is the average number of children a
The relationship between
working women and the
childbirth decline
Editor’s Note
One of the gravest problems facing
Japanese society today is the declining
birthrate. It is both the hardest to solve
woman will bear over her lifetime, was One of the debated points in the and the one with the greatest impact.
1.32 in 2006. While this is slightly above discussion of measures to promote The birthrate is a fundamental factor
the 1.26 rate for 2005, the upward shift fertility is the relationship between that affects Japan’s economic growth and
appears to be largely due to temporary security, and the premise that underpins
female participation in the labor force
our social security. In this issue, we
factors, not to a bottoming out of the and the birthrate. The conventional present a commentary based on a
decline. Indeed, the government’s thinking is that when the rate of detailed analysis of how this phenomenon
population estimates are based on the participation goes up, the opportunity is viewed in Japan and what aspects of it
assumption that the rate will continue cost of bearing and raising children also are problematic for Japanese people. With
to fall and that even in 2055, it will the causes yet to be fully illuminated,
rises, and so if other factors remain there are no magic solutions to the
only recover to the 2005 level at the
unchanged, the birthrate is likely to go birthrate issue. An objective analysis of
most. Because Japan’s economic and possible countermeasures is provided.
down. When we examine the actual
social institutions, such as its social
situation in the developed countries, We also feature an American perspective
security system, were structured on on likely trends and qualities of Japanese
however, we find that there is instead
the premise of population growth, a society that may help Japan to cope
a mild tendency for birthrates to rise
population decrease endangers them. with this challenge. It is a refreshing
when female participation in the labor suggestion that characteristics regarded
Still, if only the birthrate could be
returned to a growth trend, problems force moves up. by many Japanese as “backward,” such as
strong family ties and the tendency for
of this sort would greatly diminish. Japan is low in the ranking of both seniors to continue working, may in fact
For this reason, a growing number of the fertility rate and the female be strengths of Japanese society.
people are calling for measures to put employment rate. This makes it We hope these articles will help increase
the falling number of children back on possible to argue that if more women understanding of the issue of Japan’s
the growth track. were to join the labor force, more declining birthrate and offer insights
when considering other Asian countries
children would be born. Those making
that will soon face similar challenges.
Currents No. 69 March 2008 this assertion have, however, received
a great deal of criticism. One of the
Meeting Japan’s Aging Challenge 6
By Richard Jackson and Keisuke
rebuttals is that the people making countries. If instead the analysis
Nakashima, Center for Strategic international comparisons tend to includes Mexico, Turkey and other
and International Studies arbitrarily limit the sample to certain countries with relatively low income
The Declining
Birthrate in Japan
levels, and also excludes Iceland, which Behind lower birthrates: People toward men and women marrying later
has extremely high childbirth and or remaining single is the chief culprit,
who marry late or remain single
female employment rates, the positive measures to assist existing couples can
correlation becomes hard to discern. Among the measures commonly have only an indirect effect.
proposed to reverse the decline in
Another problem is that it is not easy So which are more important, factors
the number of children are hiking the
to come up with theoretical reasons preceding marriage or factors following
allowance for children, improving
why women should have more children it? Here our attention is drawn to data
child-care centers and increasing the
when they hold jobs. One more point is on the average number of children
allowances for childbirth and child
that the relationship between work and a couple will have up to 15–19 years
care. These are all means of providing
the total fertility rate is not static. Back from the start of their marriage, or the
support to married couples. When “completed fertility rate.” The National
in 1970 the correlation was generally
thinking about ways to promote Institute of Population and Social
negative, while in the mid-1980s it was
fertility, people generally start from Security Research conducts a National
virtually nonexistent.
the idea that the reason more babies Fertility Survey on a regular basis,
When we look at changes by country are not being born is that bringing up and as shown in Figure 1, the results
over time, we find that the birthrate children is too expensive. It can be indicate that there was little change in
has clearly bottomed out in a number persuasively argued, however, that the completed fertility rate from the
of countries, such as France, the the main causes of the falling number early 1970s to 2002. On the average,
Netherlands and the United States. of children are to be found before each couple had 2.2 children. The total
The overall trend, however, has been marriage, not after it. If the trend fertility rate, by contrast, steadily
for female employment to rise and the
birthrate to decline at the same time.
Japan in the 1970s had a relatively Figure 1. Japan’s Total Fertility and Completed Fertility Rates
high level of female participation in
the labor force, but thereafter it rose
little, while the birthrate fell sharply.
Judging from this record, we cannot
confidently proclaim that getting more
Number of children
women into the labor force will result
in more children. To be sure, an upward Completed fertility rate
trend in female employment could
lead to changes in social arrangements
Total fertility rate
that make it easier for working women
to raise children, thereby lifting the
birthrate. However, such an outcome is
not necessarily assured. Source: National Institute of Population and Social Security Research, National Fertility Surveys.
No. 69 2
March 2008
declined over this period. We may say on first marriage, the age in Japan is of more than half the children are
that when young Japanese men and not notably advanced. And yet the not legally married. Japan differs
women do marry, most eventually have birthrate has continued to fall in Japan, substantially from other members
two children. as in some other countries, whereas it of the Organization for Economic
There has been a slight change in has rebounded in yet other countries. Cooperation and Development in
the situation recently. The completed The point to note is the relationship respect to this relationship between
fertility rate dropped sharply to 2.09 in between marriage and childbirth. marriage and childbirth. And as Figure
2005, provoking concern about a loss of Japanese women rarely bear children 2 demonstrates, a clear positive
capacity of couples to produce children. before getting married. Of all children, correlation exists between the share of
But another factor was probably only some 2% are born out of wedlock children born out of marriage and the
influential: the tendency among young (and are not legally legitimate). By total fertility rate.
Japanese to marry later and postpone contrast, the share of children born In countries with a large share of
having children. The Ministry of Health, out of wedlock has climbed above children born out of wedlock, it is
Labor, and Welfare reports that the 40% in Britain, France and nations in common for couples to live together
average age of women on first marriage Scandinavia, where birthrates have for some time in what is essentially a
was 27.8 years in 2004, up by 2.4 years recovered. There are even countries marriage before they legally marry. In
from the average age 20 years earlier, like Sweden, where the parents addition, children born out of wedlock
while their average age on the birth of
their first child was 28.9 years, up by
2.3 years. When women begin bearing Figure 2. Children Born out of Wedlock and Fertility Rates in OECD Countries
children at that late age, giving birth
to and raising two or three children is
physically hard on them.
From this perspective, we find that
the dwindling number of children
Total fertility rate
can be largely explained by factors
that precede marriage rather than
factors that follow it, especially by the
tendency of young people to marry
late or remain single. Still, a persuasive
rebuttal can be advanced. That is, this Correlation
Japan
tendency among young people can be
observed in many countries and is not Share of children born out of wedlock (%)
peculiar to Japan. When we consider, Source: Compiled from data including Ministry of Health, Labor, and Welfare, Jinko dotai tokei tokushu hokoku
for instance, the average age of women (Special Report on Vital Statistics), 2005.
3 No. 69
March 2008
The Declining
Birthrate in Japan
are granted virtually the same rights other life decisions are addressed. This Another camp within the
as legitimate children, and couples sort of thinking can also be seen in government wants priority placed
with de facto marriages receive the Southeast Asian countries, albeit with on making employment compatible
same child-raising assistance as legally differences in degree. with bearing and raising children,
married couples. In such a situation, using the promotion of child-care
there will not necessarily be any direct Can birth promotion measures centers, improved maternity leave,
connection between the number of the facilitation of reemployment after
children and the tendency to marry
boost the number of children?
raising children and other similar
late or remain single. In Japan, by Views differ sharply within the
measures. In the Cabinet Office
contrast, late marriage can throw government on what to give priority
opinion poll, a fairly large group of
off the timing for having children, among measures to boost the number
respondents favored such measures
and remaining single can eliminate of children. In one camp are those
for balancing children and work. In
the chance altogether. In this very who say that the emphasis should be
double-income families that earn a
different situation, marriage trends placed on economic assistance, such
fair amount of income, these measures
impact directly on the number of as financial support through child
are more important than financial
children born. benefits, medical-care subsidies,
support. We need to note, though, that
child-care and education assistance.
A variety of factors lie behind the the positions of the two camps are not
There are solid grounds for holding
tendency to marry late or remain antagonistic. Perhaps equal weight
this position. For instance, in 2005
single. Japanese women are strongly should be placed on both sets of
the Cabinet Office conducted an
inclined to reject prospective marriage opinion poll among women on measures. But in any event, attention
partners without equal or higher levels parenthood policy measures, and should be paid to the following points.
of education, and as they acquire when the surveyed were asked what 1. First, support to balance
advanced educations, it becomes was most important to reverse the children and work influences
harder for them to find a suitable fertility decline, by far the most choices people make as a
partner. Another factor, one that has popular response, picked by 69.9%, matter of individual freedom.
was “economic assistance measures.” From the policy perspective,
shown signs of receding recently, is the
Again, in its 2005 basic survey on such support is more
large number of financially unstable
fundamental than economic
young people who are “freeters” births, the Ministry of Health, Labor,
support and is of greater
jumping from job to job or are “NEETs,” and Welfare asked why they had
urgency. Bringing up children
those who are “not in employment, fewer than what they saw as the
is a very human act. No matter
ideal number of children. The top
education, or training.” To such how it is viewed, it would be
reply, picked by 65.9%, was “because
youngsters, marriage is something unnatural to place restrictions
raising and educating children is too
far from their reach. In Japan’s case, on this human behavior and
expensive.”
marriage has to come first before force women to make a choice
No. 69 4
March 2008
between holding a job and benefits and other such fiscal approach to supporting children and
raising a family. support for families. And their families. What should be Japan’s
2. Second, there is a need for while corroborative studies stance in this respect? An examination
measures to raise the policy have found some evidence of recent public documents shows that
effectiveness of economic that increasing the support to “reversing the birthrate decline” has
assistance by channeling it on balance children and work can become a key policy objective. In my
a preferential basis to those enhance female employment, opinion, however, policies should be
who truly need it. Instead of few have shown that such framed as measures to assist families
distributing assistance widely support also leads to more as a whole, including children, rather
and equally, it is better and children. than targeted measures to turn the
more effective to focus it on The tendency among countries that birthrate around.
households in which income have succeeded in the recovery of Children bring economic benefits
imposes a constraint on having birthrates is to position their assistance to society. They stimulate economic
children.
programs as a “family policy.” That is, growth and make financial resources
available for social security. These
positive influences on society are
known as external economic effects.
The tendency among countries that In this way, children are public goods
have succeeded in the recovery of that create these effects, and they
birthrates is to position their assistance are, in this sense, truly a treasure of
society. We should provide economic
programs as a “family policy.” assistance to the households in which
this social treasure is being brought up
at considerable cost. When we view
measures to cope with the dwindling
3. Third, it is by no means rather than formulating measures with number of children in this light, they
clear how far the birthrate the explicit aim of lifting birthrates, are clearly highly meaningful even if
can be lifted using either they put together programs designed they do not work directly to boost
set of measures. There is no to assist children and their families. the birthrate.
correlation between the total Of course, a family policy may have an
fertility rate and the share of underlying objective to avert a crisis Takashi Oshio is a professor at the
a country’s gross domestic from a birthrate that falls too far, but Graduate School of Economics of Kobe
product that is used for child on the surface, it is a comprehensive University.
5 No. 69
March 2008
Meeting Japan’s Aging Challenge
By richard JacksOn and keisUke nakashima,
cenTer fOr sTraTegic and inTernaTiOnal sTUdies
E verybody knows that Japan is
ground zero for global aging.
Fertility has been at or below
replacement longer than in any other
country and life expectancy has risen
greatly diminished geopolitical role in
the world.
CSIS, however, remains optimistic
about Japan’s future. We are optimistic
rising costs of supporting their graying
populations. To the surprise of many,
including ourselves, Japan scored
in the “middle vulnerability” rather
than the “high vulnerability” group.
because, despite the magnitude of
to the highest in the world. With an the demographic challenge, Japan Why? Not because Japan doesn’t
elderly share of 20 percent, Japan enjoys a number of economic, social face a massive future fiscal burden
is already the oldest country in the and cultural advantages that most for old-age benefit programs. In fact,
world—and its age wave will continue Western countries do not. We are it faces one of the largest. Rather,
to roll in for decades to come. By also optimistic because Japan, in it was because, in constructing the
2025, the elderly share of Japan’s its long history, has repeatedly Index, we looked beyond the cost
population will be passing 30 percent risen to great challenges and projections and took into account
and by 2050 it could be approaching 40 various measures of society’s ability to
percent. Meanwhile, Japan’s working-
age population began to shrink in the
late 1990s and its total population in
2005. The Japanese government, half There is no question that the aging of its
seriously, projects the date there will
be only one Japanese left. population is one of the most serious long-
The apocalyptic demographic term challenges facing Japan today.
projections have led many in the West—
and some in Japan—to conclude that
the future is one of inevitable economic
decline. And indeed, there is no reinvented itself to meet radically adapt to the challenge—and here Japan
question that the aging of its population changed circumstances—often to the scored very well.
is one of the most serious long-term astonishment of the rest of the world. Perhaps Japan’s biggest advantage
challenges facing Japan today. It will We believe that Japan will rise to the is the relatively low level of elder
throw into question the ability of new challenge of aging—and in doing dependence on government. Public
society to provide a decent standard so, it will help lead the way for aging benefits, including everything from
of living for the old without imposing a countries everywhere, especially in pensions to social assistance, account
crushing burden on the young. If current East Asia. for just one-third of the after-tax
trends continue, it will also push Japan In 2003, CSIS issued a report called income of elderly households in
toward a secular stagnation in economic the Aging Vulnerability Index that Japan, about what they do in the
and living standard growth—and a ranked the vulnerability of the 12 United States. In most European
major developed economies to the countries, with their more generous
No. 69 6
March 2008
welfare states, more than half of the generations.” Meanwhile, reform
elderly income comes in the form of efforts elsewhere in the developed Table 1
a government check, and in France world have often encountered fierce Government Benefits in
two-thirds does. (See Table 1.) Elders resistance—from a powerful senior
2000, as a Percent of
After-Tax Elderly Income*
in Japan make up for the gap in part lobby in the United States and from
through greater savings during the labor-linked political parties in Europe. Average 3rd Quintile
working years. Another difference is Unfortunately, the alternative
that Japanese elders continue to work US 35% 54%
sources of support of Japanese
at much higher rates than elders in elders are beginning to weaken. Japan 35% n.a.
other developed countries. In Japan, The share of elders living with their Canada 42% 62%
29 percent of men aged 65 and over children, though still relatively high, Sweden 57% 70%
remain in labor force. In the United has been continuously declining
States 20 percent do, in Germany 5 since the 1980s. While this is in part Netherlands 54% 74%
percent, and in France just 2 percent. because rising incomes have made UK 50% 75%
The Japanese extended family also it easier for elders to live alone, Spain 64% 77%
continues to play an important role in Japan’s traditional Confucian ethic
providing support in old age. In Japan, France 67% 78%
is also under assault from the rise
more than 40 percent of elders live of Western “individualistic” values. Italy 59% 83%
with their grown children, while in Even as the family weakens, Japanese Germany 61% 84%
many European countries the share is elders may find their employment
*Excludes health and other in-kind benefits.
less than 15 percent and in Sweden it is opportunities more limited. This may Source: The CSIS Aging Vulnerability Index
less than 5 percent. seem paradoxical given the emerging
The strength of these alternative shortage of younger workers. But as
sources of income support, combined Japan’s agricultural and service sectors the adequacy of the system. The
with Japan’s remarkable cultural ability come under assault from globalization government projects that the
to build social consensus around and new technologies make old skills “macroeconomic slide” introduced
shared sacrifice, has made it politically obsolete at an accelerating pace, the in 2004 will reduce the Employees’
easier to reign in the rising cost of jobs that many elders now rely on may Pension Insurance system’s
public old-age benefit programs. Since disappear. If Japan does not help them replacement rate to just 52 percent
the mid-1980s, Japan has enacted four continuously upgrade their skills, they by 2025. This projected replacement
major rounds of cost-cutting public may become increasingly unemployed rate, moreover, overstates the actual
pension reform that have repeatedly or even unemployable. living standard of future retirees,
reduced per capita benefit levels and Meanwhile, reductions in public since once benefits are awarded
raised retirement ages, often with an pension benefits have been pushed they are no longer indexed to wages
explicit appeal to “equity between so far that they are threatening during retirement or indeed, with
7 No. 69
March 2008
Meeting Japan’s
Aging Challenge
the macroeconomic slide, even fully
indexed to inflation. What’s worse,
replacement rates will almost certainly
need to be cut again. The government’s To meet the challenge of its aging society, Japan
projections assume that massive will have to ensure that support systems for the
general revenue subsidies and a large- elderly are not only sustainable but adequate.
scale reserve fund drawdown will
help prop up the system’s finances.
Japan’s current fiscal outlook makes
the first assumption questionable. As
for the second, it is difficult to see how Shimbun poll, 76 percent of the public much more successful at allowing
near-term surpluses that are not being distrusts the public pension system, women to balance jobs and family. An
economically saved can later be used and the share rises to 87 percent aging United States in particular also
to cover long-term deficits. among people in their twenties. enjoys another big advantage that an
As time goes by, moreover, it is aging Japan does not—namely, its long
The next time that the government historical tradition of welcoming and
turns to the public to ask for another also becoming clear that along with
its advantages, Japan labors under assimilating migrants from younger
round of sacrifice, it may meet much and faster growing countries around
more resistance than it has in the two significant disadvantages. Japan’s
conservative workplace and family the world.
past—and not just from pensioners.
There is now growing resentment culture often confronts women with To meet the challenge of its aging
among the working public about a zero-sum trade off between jobs society, Japan will have to ensure that
scheduled hikes in contribution rates, and family, which is why Japan has support systems for the elderly are
and widespread agreement among both one of the lowest fertility rates not only sustainable but adequate.
policymakers that contributions cannot in the OECD and one of the lowest It will have to strengthen the private
be raised further than scheduled in female labor-force participation rates. employer pension system by requiring
current law. We see this resentment Indeed, Japanese women who work that all benefit promises, including
in the growing number of workers, outside the home are often triple- severance pay, be fully funded. It
especially young workers, who are burdened—by jobs with long hours will have to cultivate a long-term
evading joining the system and are and inflexible schedules, by taking investment culture that raises
not paying their full contributions. care of demanding children (and the dismally low rate of return on
The recent fiasco in which the Social husbands) and by looking after elders. household savings. And it will have
Security Agency lost as many as 50 Some Japanese watchers joke that to search for ways to strengthen the
million pension account records has they have to be “superwomen” to do traditional ethic of filial piety before
not improved public confidence. all three. The United States and much it weakens irreparably. Beyond
According to a June 2007 Yomiuri of Europe, especially France and the retirement policy, Japan will have
Scandinavian countries, have been to engineer a more far-reaching
No. 69 8
March 2008
transformation of its society and of entry-level workers. But it also In some ways, the transformation
economy that allows it to make the needs more babies to avoid long- that Japan must now embrace will
most efficient use of its increasingly term population decline. Government be every bit as sweeping as that
scarce human capital. It will have officials, business leaders, and which catapulted it into the ranks of
to overhaul a notoriously rigid educators will have to join forces industrial countries during the Meiji
educational system to ensure that it to combat stereotypes of women in Restoration—or allowed it to emerge
gives young people the skills they need the workplace and the family and from the defeat of World War II as
to keep the economy internationally persuade society as a whole that a global economic superpower. Just
competitive. As its workforce shrinks productive careers for women are not as Japan pioneered the “Japan Inc.”
and ages, it will have to move beyond incompatible with raising children. development model in the early
the traditional “three box lifecycle” The importance of success cannot be postwar era, it now needs to fashion a
of education, work and retirement. overstated, for at a 1.3 fertility rate new aging model. If it succeeds, it will
Future workers, regardless of their there is no long-term solution to the not only help ensure its own future
age, will have to maintain and upgrade aging challenge. Even if Japan were prosperity in what is being heralded
their skills and knowledge through to raise the retirement age into the as the East Asian Century, but will also
“distance leaning” and continuing mid-seventies, it wouldn’t be enough help point the way for other fast-aging
education programs. to keep the labor force from shrinking countries in the region—especially
Above all, Japan’s workplace and and economic growth from slowing. the Tigers, which are now making the
family culture will need to evolve Higher levels of immigration would transition from “aging society” to “aged
in ways that help women meet the certainly help. But it is doubtful that society” even more rapidly than Japan
multiple demands society is placing Japan will be willing to accept the did and which share many of the same
on them. Japan needs more women social and cultural changes that large- strengths and weaknesses. Once again,
to work to make up for the deficit scale immigration would bring. Japan stands at one of history’s
great crossroads.
Richard Jackson is a senior fellow and
director of the Global Aging Initiative at
Above all, Japan’s workplace and family culture CSIS. Nakashima Keisuke is a research
will need to evolve in ways that help women meet associate at the CSIS Global Aging
the multiple demands society is placing on them. Initiative.
9 No. 69
March 2008
Publisher & Editor: Hideaki Tanaka,
Keizai Koho Center
WASHINGTON, DC
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PAID
WOODBRIDGE, VA \Keizai Koho Center (KKC) is an indepen-
PERMIT NO. 534 dent, non-profit organization designed
to promote the understanding of Japan’s
economy and society at home and abroad.
Its financial resources are derived entirely
from the private sector.
KKC fosters a deeper understanding of
Japan’s basic social structure. Further-
more, it conducts public affairs activities to
improve the Japanese people’s recognition
of Japan’s global role.
The views expressed in this newsletter are
of the contributors and do not necessarily
represent those of the Keizai Koho Center.
No. 69 10
March 2008
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