Japan,  Governance, and  more

Facing an ageing and shrinking population

Japan's society is rapidly ageing due to a prolonged and now record high life expectancy and a reduced and now very low birth rate. A longer life at good health implies a higher level of welfare. Given the high population density and resource scarcity of the country, a shrinking population may also be considered beneficial. However, there are many structural adjustments necessitated by demographic change, especially as it occurs at such a fast speed:

  • Public welfare systems that rely on a redistribution of income from the working population to the elderly need to be reformed.
  • Labour market institutions, human resource management practices and career paths need to be adjusted to not only keep elder people in employment, but to also make effective use of their expertise.
  • Education, public infrastructure and the supply of consumer goods and services will have to respond to the changing needs of an ageing population.
  • Whereas the young save, the elderly dissave. Japan's once record high household saving rate has recently been close to zero and will even turn negative. This reduces Japan's current account, challenges the sustainability of its internally financed record high government debt and puts the financial system that has been relying on domestic supplies of loanable funds to a test. 

Own research

A broschure jointly edited with Thusnelda Tivig from the Rostock Center of Demographic Change analyzes the various aspects of demographic change comparing Germany and Japan. The broschure published in 2011 can be downloaded for free from the website of the Center - sorry, only in German.

A book jointly edited with Harald Conrad and Viktoria Heindorf looks at the challenges that human resources management faces in ageing societies like those of Japan and Germany. It was published by Palgrave in 2008.

There are two other articles looking at the impact of demographic change on labour: 

  • Demografischer Wandel in Japan – Auswirkungen auf die Beschäftigungssituation älterer Personen. In: Deutsche Rentenversicherung Bund (ed.): Die Lebenslagen Älterer. Empirische Befunde und zukünftige Gestaltungsmöglichkeiten. (=DRV Schriften Band 85). Berlin, 2009, 109-120.
  • (with Daniel Dirks et al.): The Japanese Employment System in Transition. In: International Business Review 9, 2000, 525-553.

An article written in 2007 analyzes how demographic change affects Japan's financial system:

  • (with Tomonaga Horiguchi) Demographischer Wandel in Japan – Auswirkungen auf das Finanzsystem. In: Bundesverband öffentlicher Banken Deutschlands (ed.): Auswirkungen der Bevölkerungsentwicklung auf Banken und Volkswirtschaft. Berlin: VÖB, 2007, 95-105. 



Franz Waldenberger | fw@franzwaldenberger.de