In Japan, employers often struggle to fill job vacancies. Spending on health care and pensions has swollen Japan’s public debt to more than twice the size of its economy. The International Monetary Fund has estimated that the country’s annual economic growth could be 1 percentage point lower for the next three decades because of Japan’s aging population. That means the country’s economy, forecast to expand 1 percent this year and next, may stagnate further.
6. What can governments do?
Immigration can help, but not all countries are willing to open their doors. Japan, historically wary of immigrants, under Prime Minister Shinzo Abe wants to allow more foreign workers for limited stays. Abe is also encouraging more automation and more women in the workforce. Germany’s fertility rate, at 1.5, is the highest in decades, thanks in part to a recent immigration surge but also to adoption of family-friendly policies, including raising parental-leave allowances. But in France, which for years has had pro-baby policies, such as cash bonuses and tax breaks for parents, the 1.96 fertility rate is its lowest level since 2005.
7. Can China reverse its expected population decline?
Not likely. China changed its rules in 2016 to allow two children and now may remove limits altogether. While that may encourage some families to have more babies, it won’t give a major boost to the national fertility rate, according to Chinese demographer Cai Yong. Among the obstacles: high living costs, long work hours and surging child-care expenses.
This story provided by Bloomberg News.