JEI's Spin on the News

Still Not Many Babies

Monday, June 14, 1999

The birth dearth is still with Japan. Last year the predicted number of births per Japanese women fell again, as it has virtually every year for more than two decades. According to June 11 Health and Welfare Ministry data, the total fertility ratio, dropped to 1.38, the lowest ever. Any figure lower than two implies that Japanese couples are not replacing themselves in the demographic pool. In fact, given the lack of immigration in Japan and a handful of deaths among women before their childbearing years, a ratio of 2.08 is necessary to maintain stable population in the long run. The United States has a higher total fertility rate and much greater immigration, giving this country little prospect of a stable population in the foreseeable future.

By contrast, Japan is expected to reach stable population in about ten years after which population will continuously decline for most of the rest of the century according to official forecasts. The latest figures may move those expectations forward.

For Japanese policymakers, the birth dearth is a short-term and very long-term blessing but a medium term problem. Not only does it mean that Japanese couples will be able to participate in the labor force more, the public and private burden of educational will be smaller. Both phenomena should boost economic growth beyond levels it would otherwise reach in the next few years. Over the very long term, Japan, among the most crowded nations on earth, benefits from less competition for space and reduced environmental degradation.

Policymakers emphasize the medium-term disadvantages, however. Fewer workers than otherwise 20 to 25 years from now will reduces sources of funding for programs to provide income, health care and other benefits to the elderly. In fact, the 20-year drought in births is about to affect employment levels. Depending on participation rates, the labor force could start shrinking in size within a few years.

EI's Spin on the News" are the opinions of one of more members of JEI's staff and do not necessarily represent the views of the organization.

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