Will Japan's Population Death Spiral?
With migration, national demographics can enter vicious cycles of decline, or virtuous circles of growth.
Fertility in Most Countries is Low and Falling
Fertility is dropping very rapidly worldwide. We do not know precisely why, although changing cultural norms, increasing access to contraceptive technology, rising incomes, urbanization, and even hormone-disrupting pollution could all play a role. Look at the following table of selected countries from the prolific Twitter account Birth Gauge:
First, we see that a wide range of countries are below the replacement total fertility rate (TFR) of 2.1 children per woman. Second, we find that the fertility rate is not just low but dropping fast. Many countries are estimated to have had double-digit percentage drops in the number of births from 2022 to 2023.
Due to the rapidity of the decline in fertility rates and because the effects of falling fertility are delayed, mainstream discourse has not yet adjusted to the implications of this data. Many of us still operate on the assumption that while the rich world is somewhat below replacement fertility levels, most of the world still has plenty of children (or perhaps too many). The data above shows that this view has been outdated for at least a decade—medium-income countries and many poor countries are not achieving the replacement rate of 2.1 children per woman and will soon begin to shrink.
Will Fertility Recover?
We are in uncharted territories, but there aren’t many signs that fertility will recover. There are essentially no examples of countries that have permanently reversed a serve drop in fertility, partly because such drops in fertility are a recent phenomenon. There have been bumps in fertility rates, particularly surrounding historical disasters such as wars, famines, or plagues, but fertility usually returns to trend after the event concludes, often with a baby boom that compensates for the loss from the disaster. The issue here is not a specific drop in fertility at some point in time or in some particular country but a centuries-long global decline in fertility without any apparent single cause.
Taking a close look at Total Fertility Rates among the nations of Earth on Our World in Data we find zero instances of a country undergoing a shift to below replacement fertility and then reversing the trend. It is rare for TFRs to move upwards at all—they tend to move sideways or down. The baby boom experienced in the 1950s in many countries is perhaps the one exception. The story is almost universally that of the classic demographic transition—countries begin with high birth rates, high death rates, and low incomes and move towards low birth rates, low death rates, and high incomes. However, the story of the classic demographic transition has not concluded, as many often assume. We are inside of the story… we don’t yet know how it ends! Could it be that fertility just keeps going down indefinitely? What does it mean for a country if birth rates fall to a TFR of 1 or lower and remain there for decades? We are about to find out.
The Ongoing Story of Demographic Transition
Demographic transitions are slow affairs; they can take over a century to complete. We know this, since in most wealthy countries, they began over a century ago before the first world war. France was the first country to begin its demographic transition nearly 200 years ago! The map below shows the decade when European countries first experienced a 10% drop in fertility. It is thought that changing social norms in France set off the transition; these norms then spread elsewhere.
Lately demographic transitions have been happening more and more rapidly. While European countries have experienced slowly declining fertility for a century or more, many countries are now experiencing much more rapid drops in fertility. Iran’s fertility fell from more than 6 children per woman in 1986 to fewer than 3 per woman in just 10 years.
But more recently we have begun to observe the countries with ultra-low fertility rates. Fertility in South Korea has simply been falling off a cliff. It is unclear when and how the demographic transition will end of the South Koreans.
Population Death Spiral
But even if we assume that fertility rates have stopped declining and will hold steady where they are, the consequences will be dramatic. In Japan, there were roughly twice as many deaths as births last year. This of course means that, given limited immigration, Japan is shrinking by more than half a million people each year. The number of genetically Japanese people on earth is declining by hundreds of thousands each year.
The UN forecasts population by age category, and it anticipates that by 2050, there will be roughly one dependent (youth age 15 and under plus elderly age 65 and over) for each working-age person in Japan.
Japan currently has a relatively high employment rate, with roughly 4 of 5 working age adults employed. If this employment rate remains where it is, the UN forecast implies that in just 13 years there will be one dependent for each employed person in Japan. Each working person needs to support themselves, as well as a person who is either too young or (more likely) too old to work. This will be an incredible burden on workers and will require a substantial proportion of worker incomes to be let go in taxes. Government spending as a share of GDP has trended up and up in Japan, and these demographic changes imply it will need to continue.
But how realistic are these forecasts from the UN? Perhaps we should not expect society to simply remain stable as it ages and shrinks in population. As the dependency ratio worsens in Japan, workers could face higher taxes and social security contributions. At the same time, economic growth could be constrained by an elderly culture and a dearth of youthful innovation. As the demographic transition continues in nations worldwide, Western countries comfortable with high immigration will find themselves increasingly pressed to find skilled workers. Japan will offer a tempting pool of labour, with still tens of millions of highly educated and pro-social working-age people.
We are in the middle of history—never has such a ubiquitous and rapid transition to below-replacement fertility occurred in the story of humanity. To presume this unfolds in an orderly fashion may turn out to be complacent. The problems of Japan seem set to continue—declining fertility, stagnant economic growth, a worsening dependency ratio, and rising government social spending and taxes. With other countries offering attractive terms to skilled young immigrants, could these workers begin to flee en masse from the country? Imagine East Berlin, but without the wall—young people simply empty out of the country and head to places with better demographics, tax burdens, and economic growth. As the young leave, the dependency ratio worsens, accelerating the exodus. We could see, for the first time in history, a population collapse under the weight of its own elderly. Perhaps the young Japanese abroad send remittances to their own aged family, and those without children live off their savings and whatever meager offerings a tax-starved state can muster.
Populations grow exponentially with fertility rates above replacement. For the first time in history, we will see what happens when a population is below replacement for a prolonged period. Our assumptions that the population will decline gradually and gracefully may be misguided, as this assumes that the young will eschew opportunities elsewhere and accept declining living standards. In a globalized world, we may find that the young abandon countries with worsening dependency ratios, causing a winner-take-all dynamic. Countries with strong demographics have strong economic growth, which attracts immigration, fortifying the demographic makeup of the country. Those with weak demographics experience declining living standards, which causes their young to flee and their situation to worsen further.
Although the demographic transition we are observing today is unprecedented and new, there are some historical analogs. Post-Soviet states have experienced population declines as the fall of the USSR has enabled the best and brightest to head West, to better economic opportunity. This can sap the growth out of these countries, accelerating the decline.
In the United States we saw the same effect in regions such as the rust belt, or during the dust bowl. Regions begin to decline, then population exodus accelerates the decline. Puerto Rico chronically loses its young and ambitious to the mainland and has been shrinking for decades. Perhaps the most dramatic example is the population of Ireland, which is still below the population it had over 200 years ago. The Irish potato famine of 1845-52 was the proximate cause of the initial drop in population. However, the consequences of the disaster affected the country for over a century. As the young emigrated in enormous numbers to British colonies, the circumstances at home remained stubbornly bleak and impoverished. The population hit its rock bottom in the early 60s, more than a century after the famine ended. Again, population decline begets further decline.
For countries like Japan, the risk is that a similar effect kicks off. Indeed, with most of the world below replacement, there could be many countries that suffer from population decay and social or economic stagnation as a result, perhaps like former Soviet states. In contrast, “winner” countries could find themselves yielding a virtuous circle of demographic and economic abundance. It becomes imperative, therefore, for societies like Japan to improve birthrates, lest they enter a population death spiral. Countries that stand to benefit from immigration ought to refocus efforts on attracting and retaining the highest quality human capital, thinking of themselves as like a company attracting employees or a university its students. All countries ought to spend considerable effort increasing birth rates, which are almost universally too low; it seems clear that we are entering an era where global human capital is scarce, and demographic vitality corresponds to economic growth, social stability, and geopolitical strength.
The "rest" belt? I think you mean the rust belt. Also you must have this backwards: "In Japan, there were roughly twice as many births as deaths last year."