The Depopulation Dividend

The 'Depopulation Dividend' is an expression I invented early in 2013 at the International Union for the Scientific Study of Population (IUSSP) international conference in Busan, and which I first used in writing in an online article published by Prospect magazine on 7 October 2013 (Matanle, 2013). I define it as the advantages that can be derived from naturally occurring demographic shrinkage and which promote human and environmental sustainability.

Some Background: The Demographic Dividend

In 2003 David Bloom, David Canning and Jaypee Sevilla published The Demographic Dividend, which quickly became a seminal work in the study of population and economy. Short and accessible, the book argues that it is the age structure of a population - rather than its overall size or rate of expansion - that provides the conditions for rapid and sustained economic growth. Key to this is the transition to low fertility that accompanies improved public health and rising living standards; that demographic and economic change go hand in hand with responsible government to lift a country out of poverty and backwardness.

Bloom, Canning and Sevilla singled out East Asia's so-called 'economic miracle' as the most compelling evidence for the relationship between changes in population structure and the achievement of economic development. As such it is my belief that Japan's realisation of its demographic dividend - in other words, its emergence in the late 20th century as one of the world's richest and most developed societies - was a seminal moment in world history. It not only demonstrated conclusively that successful purposive accelerated economic development was possible for a country without a European heritage, but it has helped other East and Southeast Asian countries to follow, by a mixture of emulation, adaptation, creativity, and hard work. The East Asian model of economic growth, which Japan pioneered, has enabled hundreds of millions of people across Asia to live longer, healthier, more fulfilling, more productive, and richer lives. What could be better than that?

Consequences: Ageing and Depopulation

However, Bloom, Canning and Sevilla cautioned that this opportunity is time limited; that on the other side of the transition to low fertility lay the potential dangers of an ageing society and, later still, depopulation (2003: 38). In the 1950s Japan's Total Fertility Rate (the average number of children born to each woman) dropped rapidly and stabilised through the 1960s and into the 1970s at around the normal population replacement rate for developed countries of approximately 2.1 children. Since 1974, however, its TFR has remained below replacement, falling to 1.3 during 2000-05; one of the lowest rates in the world for the time. Japan has enjoyed a slight fertility bounce back in recent years, registering a rate of 1.43 for 2013. But, with four decades of continuous low fertility behind it, the number of women of child-bearing age has declined dramatically such that the number of children being born continues to drop, and sometime in the five year period between 2005 and 2010 Japan's total population also began to fall.

Figure 1 below shows the Japan's natural population rate of change going into negative territory first in 2005, and then continuously from 2007/8; but this data excludes the effects of international migration, which I will deal with in detail in my next blog post. Suffice it to say for now that international migration is not having a great deal of effect on Japan's overall population trends.

Figure 1. Japan's population vital statistics. Source: MIC Statistics Bureau (2014).

Demographers knew for a long time that Japan would enter a long period of ageing and, if circumstances persisted, of depopulation too. Current government estimates project that Japan may reduce in size from its current 127 million people to nearer 88 million by around 2060, while United Nations projections anticipate a slower fall to around 102 million (NIPSSR, 2014; UNDP, 2014). Of course, the actual outcome is subject to some variation from current projections. Nevertheless Japan is shrinking and ageing, and will continue to do so for some years, even decades, into the future.

Why aren't we celebrating?

The consequences of ageing and depopulation are almost always assumed to be negative. Some fear that the the government will fail to raise enough tax to pay for the care and pensions needed in an ageing society; or that the economy may even begin to shrink and encounter problems of over-capacity; or that Japanese society and culture may be destabilised in an attempt to maintain economic strength by large-scale immigration (Coulmas, 2008; Matsutani, 2006). To my mind any hand-wringing is misplaced. Here's why.

For some decades, even a century or more, over-population was understood as the major demographic problem facing humanity, due to the potential for humans to overwhelm the capacity of Earth's natural resources to sustain our consumption. In 1798 Thomas Malthus warned that the increasing rate of expansion in the world's population would outstrip our ability to produce enough food. The Club of Rome published its seminal work The Limits to Growth in 1974 with an update in 2004 (Meadows, Randers and Meadows, 2004). The underlying logic in these, as well as other, volumes being that fewer people would place less pressure on the natural environment and, combined with reductions in per-capita resource usage, the possibility of achieving long-term human co-existence within a sustainable natural environment would be within sight. If that is the case, then why aren't we celebrating the appearance of depopulation in Japan and elsewhere?

Barring a major and sudden change in fertility, ageing, longevity, and migration patterns, Japan will continue to depopulate over the coming decades, and the rest of East and Southeast Asia will follow suit. Most of Europe is either already shrinking or will do so soon. The demographic dividend is coming to an end. The age structure of Asian and European populations is changing rapidly and there is little that can be done about it. Indeed, do we need to 'do' anything? Perhaps there is an alternative.

The Depopulation Dividend

Populations are always in dynamic flux as individuals in their aggregate respond creatively to their endlessly changing circumstances with new patterns for living. Despite initial expectations that the demographic transition would produce a stable global population this has not occurred; and it was probably a naive expectation anyway. In the developed world we now face the prospect of reducing populations as a generalised condition. There is little that can be done to reverse that trend; so why not celebrate it and find out if we genuinely can realise the potential for depopulation to enhance the environmental sustainability of human life?

This is where the concept of the depopulation dividend comes into its own. Once we begin to think in this way a huge number of questions emerge, whose answers might point towards new directions for human life in the 21st century.

  • Does depopulation reduce human pressures on the natural environment?
  • Is there any evidence to support the expectation of a depopulation dividend?
  • If not, where can we get the evidence that we need?
  • What if the evidence tells us that the depopulation dividend is more difficult to achieve than we had previously anticipated?

The Future

Some say that Japan is facing a major crisis (NHK World, 2014). But every crisis also bring opportunities. I want to seek out some answers to the above questions and I am confident that researching the experience of Japan and East Asia will help us grope towards finding them. As my research unfolds I will document and track my progress on this blog. By doing so I hope to stimulate discussion, collaboration, and progress towards the goal of maximising the depopulation dividend and delivering a more harmonious and sustainable relationship between humanity and the natural environment on which we all depend.

Next instalment: International Migration in Japan.


Acknowledgements

My thanks to Professor Natalie Jackson, Director of the National Institute for Demographic and Economic Analysis, University of Waikato, New Zealand, and Mr. Roger Martin, Chairman of Population Matters, UK, for their cooperation and encouragement in developing the concept of the Depopulation Dividend.


References

Bloom, D., Canning, D. and Sevilla, J. (2003) The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change, Santa Monica, CA: RAND Corporation.

Coulmas, F. (2008) Population Decline and Ageing in Japan - The Social Consequences, London and New York: Routledge.

Matanle, P. (2013) Why the 2020 Olympics won't solve Japan's problems, Prospect, Online Edition, 7 October.

Matsutani, A. (2006) Shrinking Population Economics: Lessons from Japan, Tokyo: International House of Japan.

Meadows, D., Randers, J and Meadows, D. (2004) The Limits to Growth: The 30 year Update, London: Routledge.

MIC Statistics Bureau (2014) Japan Statistical Yearbook 2015, Ministry of Internal Affairs and Communications Statistics Bureau Website, Accessed: 30 December 2014.

NHK World (2014) Japan's Depopulation Crisis, NHK World, First Broadcast 2 May 2014., Available from Youtube, Accessed: 30 December 2014.

NIPSSR (2014) 将来推計人口・世帯数 (Population and Household Statistics Projections), National Institute of Population and Social Security Research Website, Accessed: 30 December 2014.

UNPD (2014) World Population Prospects: The 2012 Revision, United Nations Population Division Website, Accessed: 30 December 2014.