This is very fashionable to say in all the news coverage on Japan (a "worrying rise of the world's oldest population,"according to the Post), but it's not clear what it means. The concern is that Japan will not have a large enough workforce to support its dependent elderly population. There is no evidence of that problem at present, when the unemployment is a historically high (for Japan) unemployment rate of 5.7 percent. As a more general issue, a relative decline in the size of the labor force would simply mean that the least productive jobs go unfilled. This could mean, for example, that jobs held by the pushers who shove people into Tokyo's overcrowded subways may go unfilled. There may be fewer people working as parking lot attendants, custodians in office buildings and convenience store clerks. As an offset, this densely populated country, with very high land prices, will become less densely populated and have lower land prices. It will also be much easier for Japan to reduce its greenhouse gas emissions and other pollutants. It is difficult to see where the crisis lies. Of course one reason that Japan has such an old population is that its life expectancy is so long. At 82.1 years its life expectancy at birth is four years longer than that of the United States. It is also worth noting that, dispute a debt to GDP ratio of more than 180 percent, its annual interest burden is less than that of the United States.
--Dean Baker
