CHAPTER I INTRODUCTION Background of the study: Japan, or The Land of the Rising Sun, is an archipelago composing of 6,852 islands, which houses over 127 million people according to Official Statistics Bureau of Japan (2011). Japan is admired not only for its rich culture and the splendor of its history, but also its advancement of economy and technology during the course of time. At present, Japan is ranked as the world’s tenth largest in population (Central Intelligence Agency, 2011), contributing to 1.9% to the global population level. Given the geographical size, the number of people residing in the country, and the country's innate resources, Japan continues to develop into one of the most powerful countries not only in Asia, but in the whole world. Throughout its history, Japan has become dependent in agricultural, fisheries and forestry resources for their daily necessities and income, but as time progresses, Japan had learned to invest in to more additional resources, in adapting to timely human needs, while protecting its cause for environmental preservations. Likewise, Japan is naturally endowed inadequately of sufficient resources and since time progresses together with the development of unlimited human necessities The nation constructed manufacturing and processing industries which converts raw materials into a befitting products that is imported from abroad. The strategy of Japan's economic development necessitated the establishment of a strong economic infrastructure in providing the inhabitants the needed energy, transportation, communications, and technological know-how. Balancing the population's needswith the country's limited resources is considered to be one of the hardest feats, especially on the part of the governing bodies. Nevertheless, they were able to maintain the stability of their country’s progress, as proven throughout the country’s history. Nowadays, as Japan remains to continue in progress, it is now currently experiencing a sudden change of population movement. In 2005, Japan was confronted a significant modification of the country’s population quantity. It began to collapse when it was reported that a considerable amount of death rates exceeded that of the Japanese birth rates, thus making the aging society of Japan outnumbered those from the younger populace, possessing now an enormous threat not only for calculating their society's activities but to their economic progress as well today. The great 2011 Japan earthquake which hit the country with an 8.9 magnitude of tremor, massively affected the number of the Japanese population. It was reported the 8.9 magnitude earthquake caused the lives of 350 people to perish and about 500 or more missing (Buerk, 2011). This year an official of the Japanese Ministry of Health, Labor and Welfare predicted that the population of Japan will continue to decrease in a rapid measure as the number of deaths continues to rise, as well as the given rapid aging of society, while the size of the younger generation will continue to shrink (The Mainichi Daily New, 2011). It is quite ironic that a country that has been industrialized over the years, possessing better health and sanitation facilities, including essential resources such as water improved by a hundred percent and yet the population of the Japanese now declines. Likewise, the Official Statistics Bureau of Japan reported that, the present populace constitutes about an estimated one hundred twenty seven million and nine hundred and sixty thousand (127,960,000) people. This is a significant amount of people that would normallycause problems in terms of resources, environment, govemance and economic stability. Additionally the continuous rapid decline of birth rates and an increase of the death rates which result to an imbalance of the aging population from the young seriously affects the ability to Japanese maintain its economic ability to pursue further capital through their labor force. Population growth means more people are consumers, but it also could mean that more people are available to be included in the labor force. The population grows when the combination of births and immigrants exceeds the combination of deaths and the inhabitants leaving their own country, otherwise the possibilities of the nation’s economy are believe to come in to stagnation or worst decline in progress. This, however, seemingly did not prevent Japan from developing into one of today’s First -World countries by focusing on discipline as reflected through their culture, and industrialization, The present study will assess the effect of the imbalance of the present population of the aging society from the young, considering the previous given fact that the death rates outnumbered most of the birth rates in Japan, It will also study the effect of population growth in Japan with respect to the movement of its population from urbanization and the development of their country as a nation. Furthermore, this research will be assessing Japan's capability in governing the people through formalities of its law, management of the country's population, preservation of culture, and the government's accommodation of the necessities of its people. Statement of the Problem: The purpose of this study is to develop a source of understanding about the correlation between a nation's imbalance of its population and their own economy. Japan is presently one of the country’s most successful in gaining, not only as progressive economybut, its high quality of serving its inhabitants their daily necessities and giving them better faci ies to acquire, and yet they continue to face a grave socio-economic problem. This study intends to assess the causes of Japan's present population imbalance and the effect of their economic capability towards the said dilemma. The purpose of this study is to answer the following questions: 1, Why was there a sudden decline of birth rates, in which resulted to an imbalanced population between the younger generation and the aging population in Japan? 2. How did it affect its global replacement as an economic power, second now to China? 3. How did the Japanese government counteract the present dilemma and enhance sust iable development despite the stagnant inflation of their economy? 4, How will the growing aging population affect, not only Japan itself, but with other countries, especially with those that Japan had “Economic Partnership “with? Objectives of the study: The study "The Effect of the Aging Population in the Economy of Japan” is a paper that visions to propose a possible solution and to circumvent such predicament. This paper aims to illustrate the causes and effects of the aging population in Japan and identify whether the Japanese government had an established policies that can alleviate the emerging problem. These are the following objectives that the researches would like to investigate: 1. To identify the causes and effect of the Aging Population present in Japan.2. Analyze the emerging problem of the Aging Population in Japan in regards to socio economic endurance against pressures local and global market. 3. Identify the actions done and policies present, in the Japanese government and analyze its achievement on alleviating against the present problem, icance of the study: The study will be a significant endeavor in assessing the potentials of people in addressing the progress of one’s nation. It will discuss how an imbalance of population groups such as the aging society from the young, may create an adversity in one’s nation through a disproportion of activities that may hamper one’s nation progress. This study will present a more understanding of the importance of every single person’s capability in cont ing to the advancement of a nation as a whole. By giving a holistic and detailed view of how an imbalance of the population occur, students and other individuals may learn from a nation's, specifically Japan, oversight in controlling the people, thus giving one a more sense of awareness, in hopes of having to lead a group of individuals and possibly the whole nation to be more, in conducting and governing a community, concer and observed things thorough when controlling its population. Scope and Limitations: Scope The study covers “The Effects of Aging Population in the Economy of Japan” in the early 20* century until this present time. It will only briefly explain the historical significance of Japan, such as the industrial beginnings, in which it will enlighten the researches further for the said topic. It aims to examine the situation Japan is currently confronting and outline the possiblesolutions put forth by the Japanese government in order to preserve its country's population and their economic stability. The two most commonly cited ways to stop the decrease are the increasing birthrate and immigration. The difficulties posed by each of these and what they reveal about Japanese society systems, leaders and democratic development in this age of increasing interdependence will be examined, Japan is fast becoming a renowned country with the most oldest population (by 2025, 27.35%) or 33.2 million people, expected to reach the age of over 60). Attached with the aforementioned low birth rate, the problems Japan faces in the near future are acute, Naturally, the government is concerned about such scenario, This leaves the question on how can Japan ease the predicted deterioration, maintain its population and therefore ensure economic security and progress. Limitation The study is limited in Japan’s demography based on current trends as well as its historical background, The researchers limited their analytical studies through continuous visitation in University of Santo Tomas Miguel de Benavides Library. The researchers also ensures the accuracy of its collected data through examining it with authoritative websites, such as the Statistic Bureau of Japan and Central Intelligence Agency websites. It is beyond the capal of the researchers to travel to the said country in order to fulfill the queries for this research, thus, the researchers have also conducted several interviews from the authority and Japanese civilians which can enlighten the study with proofs.Conceptual framework : The effects of aging population i economy OF Japa Aging population and its impact ‘on Japanese society through furher research and interviews Economy of Japén prior to the ing populationCHAPTER II REVIEW OF RELATED LITERATURE, I. An Overview: Aging Population in Japan Accor i to the national census taken in 2000, Japan's population is 126.9 million. Children (ages 0 to 14) make up only 14.6% of that number, at just over 18.5 million. No other industrialized country has such a lower proportion of children. People aged 65 and older make up 17.3% of the total population, numbering just over 22 million, That means that one in every 5.7 people is a senior citizen. The country faces a decline in its population on a scale unprecedented in the developed world. Only a generation ago its economic growth rates and technological expertise held the West in awe Japan is at the tipping point of a population decline unheard of in a nation free of famine, pestilence or war. The country is aging much faster than other mature nations in Western Europe or the U.S. Its population will shrink by 10 million, or 8.5%, in the next 2 decades. Fewer births and prolonged life expectancy also mean older citizens. By 2030 one-third will be over age 65 (Kelly, 2008) Japan has one of the fastest-aging societies in the world. According to Asian Economic Policy Review in 2006, the share of the elderly (those aged 65 or older) in the total population was 20.6%, which implies that more than one-fifth of Japan's population was elderly, and this ratio is projected to increase further to 28.7% by 2025 and to 35.7% by 2050, according to official Japanese government projections. According to the National Institute of Population and Social Security Research, Japanese over 65 years old make up about 21% of the country's populatios ey are projected to rise to 27% in 2018 and to 35% in 2050. (Gross & Minot, 2008)Population aging is now considered to be the most crucial demographic and social issue facing Japan, and its consequences are profound. All populations are aging, but Japan's the most rapid, with the greatest ratios. Since 1995, aging population has become a household catchphrase in Japan. In fact, Japan is now viewed as a "super ageing society", largely due to sharp drops in fertility rate, combined with a big rise in longevity. (Griffin, 1995) Japan is not alone in facing the challenges of an aging society. China, South Korea, Thailand and other Asian countries are also experiencing similar population trends. Japan is joined by the entire world in facing a declining birthrate and an aging population as important issues for the 21” century. From now on Western countries should watch Japan for another reason. The choices it makes are bound to influence the way in which the rest of the aging world tackles the same problem in years to come, In future decades, its population will age more rapidly than any country has ever done before. The proportion of the aged population will double from 10 to 20 per cent in less than 25 years. Population ageing is a normal part of the modemization process whereby increased opportunities for women lead to lower fertility and improved medical care extends the life spans of older adults. (Asian Perspectives, 2007) According to UN Fund Population Studies (1982), Population aging is the growth of a particular age category of a population that often results in age restructuring ~ has followed rather typical forms in the past, which have continued into the present. This process is a function of basic demographic funds that are usually described by the term “demographic transition.” Trends among today's young people are determined by three definite factors. First is that the World War I is 50 years gone. The second factor is brought about by globalization becauseof the coming of television, high-pressure international advertising and instant world news. And lastly the generation gap between young and old in Japan may be seen most clearly in the attitude of the youth towards the emperor.(Tsurumi, 1987) The World War II, had created an unprecendented threat to human civilization which have given a tremendous effect of technological progress in Japan. Progress in technology provided a foundation for further development in Japan. The second factor is globalization, It has fundamentally changed the way people understand the contemporary world. Media and technology have highly affected the generation of youth. It has created a world without border. And lastly the generation gap between young and old in Japan since World War II, old traditions have mixed with new ideas so that Japanese culture has undergone many changes. There is a feeling among young Japanese that no matter how hard they try, they can't get ahead," They feel that every avenue seems to be blocked, because of the high regards for the old. It seems that the youth sector is being marginalized. The growth in the older population is not only observed in Japan but all across Asia as well. And it is predicted that the number of people age 65 and above is expected to grow dramatically over the next 50 years. In Asia, Japan has the oldest population in Asia with 17% age 65 and older and the most rapidly aging country in the world (East-West, 2002). There are five future trends observed for Asia's elderly. First is that there will be more who will be in the oldest age groups. Second is that most of the population will be women, Third is that fewer will be widowed. Fourth is that they will have fewer adult children. And fifth is that they will retire early. There are also proposed policy options for an aging region. And these are family support systems, greater employment opportunities, saving and financial reform, pension programs andhealthcare programs. (East-West, 2002) According to Ogawa (1984), there are observed pattems in population found in the past and the present. In 1920 the older population, totaled to 2.94 million or 5.3% of the total population. From 1920 - 1950, the aging population continued to increase by 1.4 times from 2.94 million to 4.11 million. From 1950 - 1980 - the aging population grew from 4.11 million to 10.65 million (4.9% to 9.1%). ‘There are two primary causes of population aging. First changes in fertility and mortality. The slowdown and reversal of population growth in Japan is the result of steadily declining crude birth rates combined with crude death rates that fell at first but ultimately will rise, all in the context of an age structure that is continually becoming older. And second, are changes in gross reproduction rate and net reproduction rate. The reproduction of the population refers to a change of a generation into a new one, Reproduction is measured by gross reproduction rates or net reproduction rates that generally indicate the ratio between the sizes of the daughter's and mother’s generations. The soci economic consequences of population aging are macro- economic trajectory, which causes decrease in labor supply and shortened work hours, economic slowdown and capital formation. And second consequence is the cost of social security programs. ‘There are suggested policies for the growing aging population. First is to lower the social security benefit level. Second is to make a compensatory policy to accompany the lower social security benefit levels aimed at mitigating the hardships caused to the individuals concerned. Third is the optical operation of government fiscal and monetary policies to facilitate the maintenance of a high level of capital utilization, There are also five labor oriented policies suggested. First is to stimulate the labor forceparticipation rate among aged workers. Second is the upgrading the quality of labor through a series of appropriate government vocational retraining programs for aged workers. Third is to encourage female participation in the labor force. Fourth is the technical development efforts should be directed toward the simplification of the operation of productive equipment to enable elderly workers to easily learn its operation. And fifth is the better utilization of young workers. According to Morton (1984), from 1980 to 1985 Japan’s population grew to 3.4% while from 1985-1990 Japan's growing population decreased to 2.1%. With the declining population there are more old people in Japan. This trend is known as “The Graying Japan.” This problem introduced fear to the Japanese, “Will there be enough active workers 50 years from now to support a large senior population?” Japan is fast becoming the world’s oldest ever human population (by 2025, 27.3%, or 33.2 million people, will be aged over 60) (Comelius, 1994: 378). Coupled with the aforementioned low birth rate, the problems Japan faces in the immediate future are acute. With Japan's labor force expected to decrease by 10% in the next 25 years, the economic outlook is far from bright. In all likelihood the domestic market will shrink, production will fall, the government's revenue base will contract inexorably and it will struggle to meet welfare and medical payments for an increasing number of elderly as the dependency ratio (the number of ‘workers supporting the elderly) will shift dramatically. (Julian, 2004) Japan is about to experience demographic change in an unprecedented scale, It is an issue that "will not only have an impact on economic, industrial and social security issues, but is, intertwined with the very existence and viability of Japan as a country", the Policy Council for Declining Fertility wrote in a report last year. (2010)Other countries are encouraging immigration to solve their demographic woes, but not Japan, which instead is developing an extraordinary array of high tech products and services. Much of it looks as fanciful as a 1970s edition of BBC1's Tomorrow's World. But it's a fact that the elderly in Japan control half the country's wealth, and a new "old" economy - dominated by pharmaceuticals, nursing care and medical equipment ~ is being fashioned around them. What they do now is perhaps a ipse of what consumer society may look like in Britain when baby boomers hit their 70s and 80s. (BBC, 2007) Il. Present Population in Japan: The Continuous Imbalance within the Aging and the Young. Census figures showed the population growth of Japan since World War Il, in 1946 there was an estimate of 75,750,000. In 1966 there were 99,036,000 Japanese. In 1981there was a total of 117,660,000 and on 1990 there Japan's population amounted to 123,612,000. From the figures shown from 1966 to 1990 there were findings that there was an increase in the numbers of older persons, and even of senior workers. Children are fewer numerically, in spite of the general growth of population. (Institute of Population Problems, 1990) According to Central Intelligence Agency (2012), an estimated population of the Japanese is expected to be in 127,368,088 by July 2012. It also showed the recent percentage of the age groups in Japan with 13.1% (male 8,521,571/female 8,076,173) from the 0-14 years old age group, while 15-64 years old age group made up a 64% (male 40,815,840/female 40,128,235) of the population, and finally the 65 years and over age group consists of 22.9% (male 12,275,829/female 16,658,016) of the population, Percentage of population growth rate, birth rates and deaths rate were shown. With anexpected estimation by July 2012 of -0.077%, 8.39 births/1,000 population, 9.15 deaths/1,000 population, respectively. Other information such as the hospital bed density, drinking water source, sanitation facility access and other health related resources were also shown, all giving an over satisfactory rate in which now begs the question regarding to its poor rate with the population of Japanese. According to the Mainichi Daily News (2011), It was reported that in the year 2011, the Health Ministry of Japan have recorded a significant decrease in number of 204,000. The recent reported decline in Japan was 1.5 times higher than the revised figure of about 125,000 the year before. Also it was said that the recent recorded numbers of birth in Japan are 1,057,000, which was down by 14,000 from the previous year while the number of deaths in Japan are 1,261,000, increased by 64,000 also from the previous year. It was considered the most reported caused of deaths in most of the Japanese people, were terminal diseases such as cancer, heart diseases and stroke. According to Fukudome (2012), Japan's sudden population decline also happened after seven years since the year 2005. It was reported that the population continues to decline in the year 2011, by more than 200,000, considering the recent magnitude 8.9 earthquake and a twelve ‘meter tsunami incident that happen in Sendai and Fukushima. The decline was said to be Japan's fifth consecutive year of continuous decrease of population number in Japan, which is caused by a natural occurrence (higher death rates from birth rates). The significant low rate of marriages registered in Japan (a record of 670,000 since 2011, and was said to be 30,000 lesser compared from the previous year), in hopes for couple to directly affect the decline in reproduction of the birth rates, have terminally affected the prominent population problem the country iscontinuously facing The health and general welfare of Japanese has improved vastly. Life expectancy, over 80, is the highest in the world, Like many other industrialized countries, Japan has an aging population. The present 127 million is predicted to actually decline in 2005, to perhaps 100 million in 2050. The number of people of working age ~ between 15 and 64 years ~ has been falling steadily from 87 million in 1995 to a predicted 54 million in 2050, with those over 65 rising from a fifth to a third of the population. On government estimates by 2020 there will be barely two workers to support each retiree, as against three now and four five years ago. Because of this pensions were reduced by 5% in 2000, and the age of eligibility increased from 60 to 65 (Mason, 2005). The question in why the Japanese had low birthrates during centuries of gradual but clear upward growth of the economy, a rise in income, and an improved standard of living. The answer according to Laurel Comell (1996)—author of “Infanticide in Early Modern Japan? Demography, Culture and Population Growth'-- is that Japanese were limiting family size through a variety of measures, and that they were doing so to maintain and improve their standard of living, rather than as a means of coping with dire circumstances. All scholars agree that the Japanese resorted to abortion and infanticide as a means of limiting the number of children within marriage. The figures are alarming. On present birthrates, Japan's population will peak at just over 127 million in 2006, fall to below 100 million by 2050, and to 64 million in 2100. In the year 2000 there were seven people between the ages of 20 and 64 for every two people 65 and over. By 2050 the ratio will be 3 to 2. More than 30 percent of the population will be over the age of 60.Japan is not unique in facing a shrinking and aging population as most of the European countries have seen very similar rates of falling total fertility rate, and as many of them, most notably Italy, anticipates population declines and hardly less worrisome rates of aging and increases of dependency ratios (children and retirees/economically active population). But, as in other instances of economic and social trends (persistence of Japan’s very low interest rates and the extent and duration of stock market collapse are two obvious post-1989 examples), the expected continuation of Japan's population decline and aging will take the country into an unprecedented, and truly extreme, demographic territory, making it an involuntary global pioneer of a new society. As for increasing longevity, Japan has led the global ranking for decades, and this will almost certainly continue, The country's median age is expected to increase by a decade, from just over 43 years in 2007 to more than 52 years in 2050 (it was just 22 years in 1950), and the National Institute of Population and Social Research forecasts Japan's life expectancy to rise from 78.3 years for males and 85.5 years for females in 2007 to, respectively, 80.95 and 89.22 years by 2050; men would thus gain about 2.6 years, women 3.7 years (Smil, 2007). The speed of population aging of Japan seems to be extremely rapid, never experienced by any country in the world in the past. The rapid population aging has serious impact on the social security programs. Few seem able fully to explain why Japan's birthrate at 1.29 joins that of Italy as being the lowest of the advanced economies. Delayed marriages, more women in the workforce, a lack of childcare facilities and the costs and other pressures of a distorted education, system are all mentioned as causes, though most or all these problems exist in other societies (Clark, 2004). Due to the population aging, the ratio of beneficiaries to contributors of the publicpension schemes rises considerably. As the speed of population aging will continue to rise, the r of beneficiaries to the contributors will continue to rise. To maintain the benefits rate, a large increase on the tax will be necessary (Salam, 2007). Birthrates are falling and the proportion of work-capable citizens is declining accordingly. ‘The unprecedented, continued increase in the elderly population will not only place a heavy burden on the working age population. It will also place retired people in a position to act as decision making partners of the shrinking work force in Japanese Politics. The elderly population as a percentage of Japan's eligible voters will increase from 21% in 1991 to an estimated 33% in 2025 and 40% by 2050. As the age of the median elector rises rapidly, the center of political gravity in Japan may shift away from taxpayers toward pensioners, with the expectation that the elderly will exert increasing political pressure as the population ages (Takuo, 2009) ‘One of the major factors that have recently and enormously affected the number of the Japanese population today are natural disasters. In Sendai, Japan of March 2011, it was reported in this article that an 8.9-magnitude tremor happened near Sendai, Japan which caused an enormous size of tsunami with a speed of 800km/h (500mph) and a reported 10 meter size wave, which was witnessed around the world through international reports from Japan, that bring about numerous destruction and the deaths of many Japanese residing in the sad area, It was reported that 350 people are pronounced dead and about 500 were missing, but it is feared the final death toll will be much higher, and the number of missing people may have truthfully increased. The quake was said to be the “fifth-largest in the world since 1900 and nearly 8,000 times stronger than the one which devastated Christchurch, New Zealand (which 6.3magnitude earthquake happened in the same year, but only earlier than what happened in Japan)" (Buerk, 2011) The natural disaster that recently happened might have further impaired the present problem country’s population imbalance and its productivity since it is already prominent that due to small quantity of the younger society, only a few are able to actively reconstruct the Japanese problem. Another major factor that may have impede Japan's progression towards the underlying problem due to population imbalance is the country’s less sighted importance of the participation of civil society in addressing issues, regarding national development, towards decision making in focusing only to a local level. A morning drama in Japan namely “Hatoko No Uni" (Hatoko's Sea), that was aired on April 1, 1974, which talks about a story of a fictional character named Hatoko (dove child, a symbolic name for peace), a woman who continues to find herself recovering from her painful past after a nuclear bomb exploded in Hiroshima, which have also gravely affected Kaminoseki (a local province in Yamaguchi prefecture in Japan) since it was ‘geographically situated near Hiroshima, that happened during her childhood days. This paved the way an idea for the a research to be conducted published in studying influence on a lower local government setting from Kaminoseki’s (a local province in Japan) decision in volunteering to host a nuclear power plant in 1980's, an era of industrial post war in Japan. The research shows the capabilities of business elites in influencing the decision made by local leaders in Kaminoseki. After learning that sourcing from oil reserves in the Middle East as well as mining of coals, have progressively soared in price, Japan was determined to look for other sources in order to stop relying on other countries for supplies that may greatly affect thecountry’s economy. Thus Japan started to invest in researching for the possibilities in adapting to nuclear power, even though it serves the country a painful memory during the Second World War (nuclear bombing in Hiroshima). Nuclear businesses soon rise, and started to look for possible sites in constructing nuclear pants for future utilization of possible consumers in the nearby areas. But it was not a smooth operation for business elites concentrating on nuclear power, many organizations also came about revolting against the nuclear power companies in fear for another possible incident similar to what happened in Hiroshima and Chernobyl in Ukraine, With an organization revolting against nuclear power companies present, it was hard for the companies to completely mobilize its mission to expand it potential to invite further possible consumers and capital gains subsequently. Thus in order to avoid bankruptcy for some nuclear power business companies, they begin to adjust to the occurrence of “nuclear power allergies” by strategizing in identifying specific places in which the civil society may obstruct the siting process and considering sites which had weak civil society such as Kaminoseki, and include incentive-based tools through giving rewards to those who cooperate with them. The presence of nuclear power plant in Kaminoseki have gravely affected the already depopulated province by decreasing even more in numbers, as well as the Japanese native identities to have loss gradually over the years (due to migration in other provinces or in cities) It thus concluded that by studying the historical change and the activities of civil society in the province of Kaminoseki, the researchers believed that it is important for government, especially those public servants in a local level, to not only adapt in considering matters of possible progression for the society but also consider in “understanding individual agency in anyscholarly analysis of civil society and industrial development” (Dusinberre and Aldrich, 2011) especially that the government may consider these possibilities of the study made by the authors, after the Fukushima event that happened recently. The study shows that political relation towards the people, especially in the rural areas, produces a great effect on improving one’s country. In this case, the only setting that displays its possibility was in Kaminoseki. Opinions of the public have showed its effectivity in producing great result in solving a nation’s problem, otherwise people will be left frustrated and considers greatly the possibility of migrating and thus affecting the defunct of reproduction of the Japanese population. During its early stage of industrialization in Japan, the people were very much eager in extracting expandable natural resources in order for future profits, especially with the prominent Japanese companies, all geared for nationwide progress. Brett L. Walker thoroughly discussed its environmental reaction against industrial pollution by pointing out numerous plague, such as insect related problems, agricultural problems and diseases inflicted upon to the humans. According to Walker (2011), “physical pain caused by industrial pollution is the product of toxins that navigate naturally occurring ecosystems and technological systems that are seamlessly intertwined and indicative of highly engineered environments” thus resulting in such problems that currently arises. One of Walker's examples of prominent environmental reaction to industrial pollution is the increase of mosquito population which promoted the spread of the deadly Japanese B encephalitis virus due to imbalance of natural resources preventing an increase of mosquito population, killing thousands in Tokyo and other major cities. Another example given is the “It hurts, It hurts disease” (itai, itai byo), caused by theimproved technologies in reclaiming greater amounts of copper, lead and zinc producing harmful chemicals like cadmium thus entering into itrigation systems to the crops of the rural areas affecting its nutrition and eventually poisoning its consumers. The disease were said to be more prominent with Japanese women since the cultural perspective in maintaining fair skin by shielding themselves regularly from the sun, that could have lessen the toxins by decreasing the levels of Vitamin D, with the help of sunlight in, which could finally metabolize the cadmium. that affects their system, The decrease of Shimotsuke Plain Silkworm population is also caused by the technological improvements of mines, since the copper smelters spewed sulphur-ladden smoke into the atmosphere thus resulting to sulfuric acid rains killing Shimotsuke Plain Silkworm in the nurseries Lastly, another example pointed out was the “Minamata” disease or Methylmercury poisoning, due to wide chemical plants near rural areas in which crops may have harbored and thus affecting numerous consumers. With these facts presented, it is then possible that the diseases discussed that have caused by the industrialization of the Japanese may have possibly affected reproductive health of women and its recent rampant carly deaths of the younger generation today. According to Walthall (2006), despite the Japanese’s enjoyment with their lifestyle through an endowed material possession harbored by the country, thus making everything almost accessible to the Japanese citizens, it was still inevitable for the people to face numerous social problems. One of them were unequal treatment with the “barukumins” or the minority group of the Japanese society in the early years, which have eventual lead to protests on recent times as well as the unequal treatment with Japanese women through limited career opportunities andhigh expectation given to them by the society. According to Mariko (1989), an American raised Japanese woman experience in mothering her own son in Japan, she inevitably suffers a brief culture shock when she learned that women in Japan did not share the same lifestyle she has, while living there. She reported that she is working half day as school teacher and leaving her son the day care on her way to work and retrieve him after she is done. At first she was perplexed when she leaned that women in the day care fully looked after their own kids and does not leave them a single bit, but when a local ‘woman tries to converse with her and shares her own experiences as a mother, she was astonished to find out her reaction towards the things she said against her in which she thought was normal. She realizes that the things she believed was normal were not in the perspective of those local Japanese women, She feels alienated when she was indirectly blamed by her actions towards her son, instructing her to observe more closely to him by not leaving him in any way. Concluding that the Japanese society strongly believed that married women, especially those who already have kids, are expected not to be focused on their chosen careers but instead must fully commit to their duties as a wife and a mother. It is also said by the author that Japanese women were expected to be married by the age of thirty five It is then believed that another potential factor of the problem, regarding the imbalance population of the Japanese, are it strong sense of the Japanese society towards women which may have greatly affected on today’s generation of young women’s perspective. It may have probably caused the younger generation of women to have taken another course in their lives by choosing careers rather than marriage. The expectation of marriage over the age of thirty five showed fromMariko's report may have also caused women to be fighting over their biological ability to reproduce, since it is once said that women are unlikely to reproduce when they reach the age of thirties, According to Asia Pacific Population Journal, the increasing number of single people who are at what has traditionally been seen as mattiageable age. Even if they intend to get married at some stage in the future, more than half of unmarried men and women say that they are happy to stay single until the right person comes along. One of the women who interviewed said that, “I don't feel any need to get married. I don’t want to lose that easy going lifestyle.” Women are delaying marriage to take advantage of increased opportunities for higher education and improved employment opportunities. In Japan, the average age at marriage for women who are university graduates was about 28 years, as compared with about 26 years for high school graduates. As women have acquired more education, their salaries have increased, which in turn has raised the opportunity cost of withdrawing from the labor force to rear children. This is especially true for women under 30, whose wages rose from 70 per cent of men’s wages in 1970 to almost 90 per cent in 2000. According to Hashimoto (2003), the businesses with no successors will not sustain long. ‘The uneven development of businesses can be due to population distribution of the senior citizens. With a dense senior population, the senior neighborhood will see a downturn of local businesses. The population trend in Japan is a view showing that there is a substantial aging of the Japanese population since 1950. When the Japanese children who are bom this year are themselves elderly, they will be living in a nation that is continuing to grow smaller and older. According to Gregory (1992), questions began to arise regarding Japan, if it will turnedvirtually overnight from an economic power and political pygamy into an international power with domestic feet of clay, much like the US and Europe. Certainly, much of what transpired in 1992 seemed suggestive of this, including weaknesses in stock and land, prices tumbling, corporate profits, import competition and deficit financing. When combined with longer trends such as declining gains in productivity a more open financial system, an aging society and lower household savings, the image of an impervious economy juggernaut seemed seriously tarnished. It also questions if such a nation be able to make the necessary savings and be able to increase the labor productivity to the degree that will be needed to support those children in their old age. The fact of Japan's aging population is not just statistical, It's changing the country in many ways. According to Oxford Analytica (2010), the two main forces are responsible: declining fertility rates and lengthening life spans. Japan's fertility decline is surprising given that the number of children wished for by married women has been remarkably constant, at about 2.2, for the last 30 years across age groups. However, women are marrying at later ages, delaying having children once married and never marrying at all in greater numbers, Since almost all babies in Japan are born within marriage, the combination of delay and not marrying combine to reduce fertility. Japanese women attained the longest life expectancy among 228 count 1982, according to World Bank data, and have held that position to now. A baby girl in Japan in 2008 could expect to live to 86. Male counterparts achieved the longest life distinction in 1974 and can. now expect to live to 79. TI. Future of Japan and the aging population In 2009 the invention of a robot suit by the Japanese has made several possibilities openfor, what seems an impossible solution before possible, the disable. The suit, named HAL - or Hybrid Assistive Limb - is the work of Cyberdyne Corporation in Japan. The robotic was invented for the sole purpose of “upgrading the existing physical capabilities of the human body” thus helping the disabled increasing their potentials from mobilizing better. The robotic suit HAL, is reported to have weighed 23kg. It is “comprised of robotic ‘limbs’, and a backpack containing the suit's battery and computer system. It is strapped to the body and controlled by thought”, It is expected that the robotic suit identifies these signals given by the body since when a person attempts to move, nerve signals are sent from the brain to the muscles, and very weak traces of these signals can be detected on the surface of the skin. By using a sensor attached the skin of the wearer, a signal is then sent to the suit's power unit thus telling the suit to move in unison with the wearer's own limbs. Itis said on one article from the Reader's Digest of the same year this issue was published, but due to unexpected circumstances cannot be retrieved at the moment, that these robotic suits are openly used by the Japanese farmers especially those of the aging group. This haven then concluded that it may be one of the underlying possible factors that the aging population in Japan continues to increase, due to the belief that those from aging group can still openly manage labor works with the use of advanced technologies. JPEPA or the Japan-Philippines Economic Partnership has made numerous possibilities happen for both countries, but some are still left to be discussed by the authorities. In JPEPA it ‘was reported that it has also discussed the Japan's problem towards it aging population and its urgent need of health related workers. Although many Japanese resent on openly giving job ‘opportunities to the Filipino workers since they believe in a subtle way that the potentials of theFilipino workers poses a threat to the capabilities of those Japanese health workers, Also they believe that since numerous Filipinos have illegally settled in Japan in hopes for better living, the government chose to become stricter in enabling them to migrate by establishing a procedure that those aspiring Filipinos who wishes to work abroad must abide, But both countries believe that both problems of each country can sooner be resolved through further discussion of creating policies that may benefit both countries equally. It is then displayed that through foreign relations and its policies created by both parties, it may finally somehow resolved the aging population by re-enforcing medical help from other countries while the latter help in supplementing the other's need. ‘The conti ity of the Japanese parliamentary democracy depends very largely on ‘economic factors. Japan's problem on unemployment is greatly caused by extremism, On the year 1940 Japan's population grew 25% caused by the repatriation of Japanese from abroad, natural and increase. On 1946 the natural increase amounted to a million or more each year. Between the years 1956 and 1957 the population was beginning to decline with less than a million, increase in population. It was predicted that by 1970 Japan's population will exceed 100 million, The growing population of Japan made a basic problem to the Japanese, “How to feed and clothe a population of some 90 million on four fairly small mountainous islands.” There are three main factors that could help the Japanese survive the population growth continued using of Japan's standard of level, increased exports and good domestic market. (Story, 1960) Without much further attention given by the Japanese government towards. the imbalanced position of the younger generation from the old, Japan is still believe to may have continuously suffer from its problem. Technologies, Culture and Economic prosperity that formsthe distinctive quality of the Japanese, may have been hampering their population progression and thus the problem they have for the imbalance continuously arises and solved for only a temporary period.CHAPTER II METHODOLOGY Methods of gathering data : The research on the aging population of Japan would use descriptive data from primary sources. The primary sources would be to make a review of related literature, to conduct interviews with officials from the Embassy of Japan and professors from the Political Science, Asian Studies and Sociology departments from the University of Santo Tomas. Primary sources for this research would be from statistics and demography on the population of Japan. Research design : The study entitled “AGING POPULATION OF JAPAN" is a historical discriptive research that attempts to explain the implications of an aging population for Japan. A Case study research design will be used to integrate the findings from several studies, selected from journal al les, books, theses, dissertations and statistics. The outcomes of the selected studies will be described and reviewed again in order to add or improve present study to become mutually beneficial to all. Research Instruments : The researchers made use of an interview, secondary online sources, books and online journals on the topic of this paper.CHAPTER IV DATA ANALYSIS AND INTERPRETATION This chapter discusses the summary and the full discussion of all review of related literatures and results of interviews conducted. This chapter includes the thematic framework and thematic table for easier discussion of all recurring themes that the researchers have encountered in the writing of the paper. This chapter also includes figures such as graphs that would help validate the data that was gathered through various interviews. Figure 1. Thematic framework Suggested changes / policies Effects ‘Aging population of Japan Yo Reality of the problem Causes Figure 1 shows the recurring themes within the construction of the paper. There are two illustrations on the said figure. The first figure which includes the topic “Aging Population of Japan’ is the main topic of the paper. The first figure branches out into four figures. These figures are the main themes or the global themes of the different statements of the problems asstated in Chapter 1. ‘The main themes or global themes are composed of the following: 1. The reality of the problem 2. The causes of the aging population of Japan 3. Effects of the aging population in Japanese society and economy 4, Suggested changes or policies ‘These main themes would be explained through the minor themes or the basic themes. ‘The themes that are included in the thematic framework were derived from the books and journals reviewed and interviews that were conducted for the study. Further explanations and complete discussions and interpretations are found on the different figures and tables below. Reality of the Problem Figure 2, Minor themes “Aging population of Japan Modernization Women empowermentFigure 2 shows the minor themes of the major theme that is “the reality of the problem.” ‘These minor themes would be the themes that would aid to explain the reality of the problem or why the aging population in Japan is occurring. This figure would be further explained in tabular and statement forms below. ‘Table 1. Reality of the problem BASIC THEMES ORGANIZING THEMES. GLOBAL THEMES + Modemization brings about certain shifts in culture, tradition and norms. * Good education produces women empowerment and career-oriented people. * Good economy comes up with more job opportunities. With better job opportunities people are more likely prefer to lengthen their current lifestyle without ~ Modemization - Tradition and culture — Urbanization - Women empowerment Cause of the problem of ‘Aging Population in Japantaking care of a child. , — Natural disaster * Natural disasters caused Japan a loss to its already declining population. Table 1 discusses the outlined themes that would help summarize the different causes of the problem of Aging Population in Japan. According to Asst. Prof. Dennis Coronacion of the Political Science Department of the University of Santo Tomas, Faculty of Arts and Letters the aging population is brought about by the occurrence of the worldwide modernization. Modernization brings about urbanization. It has been a part of Japanese culture and tradition to study and look for jobs in the city. With this development of this culture, the aging and aged population is left in the rural areas with only few healthcare workers looking after them for most if not all young workers are in the city. Japan is known for its good education system. Good education is equal to good opportunities and a brighter future. Thus, because of good education, men especially women end. up with great careers that rearing a child would be considered as a burden. Women chose to take advantage of increased opportunities for higher education and improved employment opportunities than to get married. In Japan, the average age at marriage for women who are university graduates was about 28 years, as compared to 26 years for high school graduates (see figure 2.1). As women received more education, their salaries haveincreased. As a result most women that comprise the labor force choose their careers over them rearing a child. This is especially true for women under 30, whose wages rose from 70 percent in 1970 to 90 percent in 2000. Figure 2.1. Enrollment rates in higher education, Japan, 1955-1995 HE Femates BD Mates 30 4 20 +}. 193s 1975 1995 Year Source : Ogawa and Clark, (1995) and Mason and Ogawa (2001). According to Second Secretary Maki Mizusawa of the Japan Information and Culture Center of the Embassy of Japan, the work scene has been dominated by the women recently. Because of more women in the work scene and business industries, they tend to focus on theit work and do not want to change their current lifestyle. Thus, they tend to delay marriage and refuse to have children. They see this as an opportunity that should be taken while it lasts. According to Ms. Mariko Tojo, a reporter from the Daily Manila - Shinbun, good economy has always been a trademark of Japan. With its good economy more job opportunities are available for the younger working class. The Japanese are career-oriented and they prefer to work than have children,Another statement that was made by Ms. Tojo is that the Japanese society is very conservative and still believes that women should stay home and take care of the family and that men are the only people that should be working. However, there has been a dramatic change in that conservative consciousness and women are now in the work scene together with the male population. But because of the said consciousness women are not getting much support from the government. As a result to this there is the emergence of “women empowerment” wherein ‘women take on careers and choose to stand by it than to establish families and to rear a child. In anarticle in the Manila Standard Today written by Carl Freire he stated that, another reason why the Japanese refuse to rear children is because of the lack of child care facilities in the society. These are facilities such as day care centers where parents could leave their children while they are working and fetch them after work. ‘One of the known reasons for the decrease in population are natural disasters that amount to loss and death of a lot of people. March 2011 was the time that Japan was hard hit by the Great East Japan Earthquake that led to a number of deaths and destruction of their infrastructures. Because of the death and the decrease in the size of the population there are less workers that could help and work for the rehabilitation and the reconstruction of the Sendai and Fukushima prefectures. After the Fukushima Nuclear Disaster, Japan announced that its population has fallen for the second year in a row, which will pose huge challenges for its economy and society. The head of the Japanese Pension Industry Database, Jo McBride said stated, “Unless the Japanese workforce makes some huge gains in productivity -- and Japanese workers are already very productive -- there are no prospects for growth in the domestic economy.”Causes of the aging population in Japan Figure 3. Minor themes _/~ Aging population of ~ C Japan e Causes Decline of fertility / mortality rate Lack of policies in population growth Exemptions from tax Table 2. Causes of the population aging in Japan BASIC THEMES, ORGANIZING THEMES GLOBAL THEMES + There is an observed pattem in the Japanese population that there are more aged than there is the young population. © Japan is the first country to experience this problem Demographic reality and findings ‘There are no policies available for the solution of the problem of aging population The reality of the problemTable 2 shows the clear discussion of the reality of the aging population in Japan. Japan in experiencing the problem of greater and growing aging population at a fast pace. The fertility rate and the mortality rate are decreasing respectively. It is evident in the demographic statistics and findings that there are more Japanese that belong to the aged and the aging group and less belong to the younger groups. There is a decrease in the mortality rate as well and the Japanese’ age ranges up to 86 and above. Figure 3.1. Population and Projected Population of Japan, 1950-2050 Population ‘Population BEES Source : National Institute of Population and Social Security Research (2010) Figure 3.1shows the population rate of Japan. On the year 1950 there was an estimate of 83.2 million Japanese and the population was able to increase by the year 2000 with the total population of 126.9 million. The projected population would continue to decrease until 2050 with the estimated population of 97.07 million.With the decreasing fertility and the increasing mortality rate in Japan this would cause the rapid aging of its population. Now the young age (age 0-14) share 15 percent of the total population and by 2050 it is projected to decrease to 11 percent. The middle age population or the working population (15-64), share almost 70 percent of the total population would fall to 55 percent by 2050. Meanwhile the old age (65+), now comprising 17 percent of the total population would be no more than 36 percent by 2050 (see figure 3.2). Figure 3.2. Proportions of the population by age group, Japan, 1950-2050 80.0 70.0 60.0 50.0 40.9 Percentage 30.0 20.0 10.0 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Source : National Institute of Population and Social Security Research (2010) Japan's population is close to reaching its prolonged decline. The median age of the Japanese population has increased from 22 years old in 1950 to 41 years in 2000 and by 2050 it is projected to 53 years of age (see figure 3.3). With this continuous trend it is not impossible for the Japanese population be dominated by the elderly.Figure 3.3. Median age, Japan, 1950-2050 & = g z 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Year Source : United Nations, (2002) World Populations Prospects Database Figure 3.4 shows the population pyramids for Japan at three points in time (1950, 2000 ‘and 2050). It is visible that the younger group of the population that comprises the base of the pyramid is depleting while the elderly population at the top is gradually increasing. Projections in 2000 and 2050 indicate that this trend would continue. Not only will the younger generation (the generation that would soon be the ones to give birth to the children) decline, so will the workingage groups. The serious issue is that the dependent elderly would only be the population group that would continue to increase, which would place a heavy burden to the shrinking working, group population. Figure 3.4. Changes in the population pyramid 2050 (Projection) Millions Millions Millions Source : United Nations, (2002) World Populations Prospects DatabaseThe aging population is not an uncommon problem to most developing countries according to Asst. Prof. Dennis Coronacion of the Political Science Department of the University of Santo Tomas, Faculty of Arts and Letters. It is a common problem because of the emergence of a better economy and better job opportunities. However, according to Mr. Mizusawa there are different countries that are experiencing this problem but Japan was the first country to experience it and it has the fastest rate as well. Japan being the first country to experience the said problem it has no option to copy, develop and improve on any available policy for there is, none available, Instead the countries experiencing the said problem are waiting for Japan to come up with a possible solution against it. Mr. Aisuke Arakawa, a director of the Philippine Ré -ment Authority ~ Japanese Club Assn., Inc, said that one of the causes why there is a decrease in Japanese population is because of the tax exemptions of the elderly. He said that during his time the health insurance that is, being provided for by the Japanese government is free for everyone. However, because of the depleting population and the slowing down of the Japanese economy less Japanese are able to pay for the additional insurance taxes. Most of Japan's population are composed of the elderly and they are no longer able to work thus they are not able to make an income to pay for taxes. 70% of With less taxpayers the health insurance is no longer free of charge but of a 70:30 rati the total health insurance would be provided by the government while the remaining 30% would be allocated from the taxpayers’ money. With the constant and rapid decrease in the Japanese population the ratio could go up to even a 0:100 ratio in the next years or decades to come. ‘One of the real causes of the decline in fertility rates are the delayed age of marriage and the increased lifetime celibacy. The percentage of Japanese women who are married hasconstantly declined because of higher ages at marriage and an increasing proportion of women who never marry at all. The mean age at marriage has gone up by 3 years since 1975 and the proportion of women who are not likely to marry at all has increased from 5 percent to 15 percent in the same period. As a result the Japanese women in the childbearing ages (25 to 29), are not married (see figure 3.5). Figure 3.5. Proportion of females never married, by age, 1930-2000 Age 2024 Age 25.29 Age 3034, Age 35.39 Source : National Institute of Population and Social Security Research, (2001). In a research study conducted by David E. Horlacher and Landis MacKellar they mademention that the pressure to care for the elderly also contributes to lower fertility. By the year 2025 it is projected that Japan will have 5.2 million elderly that would requite full-time care. The likelihood that a woman may have to give up a full time job to take care for an elderly paent is rapidly increasing. With this constant trend it is most likely that in the same year, almost half of the non-working middle aged women will be providing elder care. Economic effects of the agin; Figure 4. Minor themes Aging population of Japan Effects Decline in the 5 5 Economie Pension work force slowdown plans and and capital benefits formationFigure 4 shows the minor themes of the major theme that is the “effect of the aging population in Japan.” These themes are further explained on the table and statements below. Table 3. Effects of the aging population in Japanese economy BASIC THEMES. ORGANIZING THEMES GLOBAL THEMES © Pension plans and governmental benefits are prioritized for the aged population * Because of the decrease in the younger generation. There is also a significant decrease in the availability of the workforce. * More women are given good job opportunities Priority on the Aged population — Pension plans — Governmental benefits = Less young workers — Less healthcare workers — Women empowerment Effects of the problem of aging population in the Japanese society © There would be a shrink in the domestic market * Less monetary circulation © Less workers would eventually result to less — Economic slowdown and capital formation ~The government would struggle to meet the welfare and the medical Economical Impacts of the problem of Aging population in Japantaxpayers needs of the Japanese Table 3 explains the effects of the aging population in the Japanese society. With its aging population present it will relatively threaten the economy of Japan to decline, The accelerating number of the aging population will drag the Japanese government in the long term to financially be responsible for the health of the said group through public health insurance, which can possibly weaken Japan's capability to improve further. By concentrating on the needs of the majority (the aging group) rather than giving equal discernment with other minor factors, such as insurance for other health problems or technological development and infrastructures, the aging problem will ultimately remain if the government will not deliberately and patiently act in solving it. ‘The growing percentage of the elderly making up Japan's population is not just a problem for pension funding, but will affect the economy as a whole because a larger dependent population will lead to slower economic growth, As the productive population declines rapidly, there is a risk of lower potential economic growth resulting from lower labor input and lower savings and investment. In addition, a higher proportion of elderly people may also cause fiscal imbalances due to increasing social security costs. According to the life-cycle hypothesis, the household savings rate will be higher in a country with a younger population because the young typically work and save, whereas the elderly typically retire from work and disserve their previously accumulated savings. Conversely, one would expect a country's household savings rate to decline as the population of that country ages and its elderly dependency ratio increases. (Horioka, Suzuki, & Hatta, 2007)Between the years 1965 and 1995, Japanese real Gross Domestic Product (GDP) more than tripled and by 2000, real GDP had risen to 518 trillion yen ($ 4.5 trillion), (Government of Japan, 2011). The annual growth rate between the years 1945 and the mid-1970s was amounted to about 8 percent per year. Figure 4.1 shows that the growth rate of the Japanese GDP has been very low during the most of the 1990s. In 1960, per capita GDP in Japan was equivalent to $ 4,700 (in purchasing power parity terms). By 2000, the figures have risen to $ 24, 900. Between the years 1991 and 2000 the average annual growth rate of Japan's GDP had fallen to 0.5 percent. The Japan Center for Economic Research (1998) projected that, over the next 25 years, total GDP will fall but per capita GDP will continue to grow, albeit slowly. Figure 4.1, Annual rates of growth of GDP, Japan (1905-2000) 5 5 2 E 2 1920-35 1960-75, Period Source : Itoh, (1996). According to interviews with Ms. Myma Nosete and Akemi Relos Saga, both residents ofJapan the former a Filipino citizen engaging in business in Fukuoka, Japan and the latter a es, pension plans and governmental Japanese citizen who was a former student in the Phili benefits amount high to about 100% compensation upon retirement. This was granted to Japanese aging 60 years old and above. However in the year 2005 there was a new policy that the retirement age of 60 be changed to 65 so that the people between the ages of 60 and 64 would still engage in work. The people that belong to the aged group receive 100% compensation and benefits from the government. With the high amount of compensation early retirement became an option for most Japanese workers. The governmental benefits are from the taxpayer's money burdened upon by the younger workforce, These young workforces tend to pay little or not at all for they think that they would not be able to benefit from the pension during their retirement. This perception is brought about by the rapid problem of the aging population Because of the decrease in the younger population, there is an equal and significant decrease in laborers including the healthcare workers. The ratio presented it 1:1(1 young healthcare worker to 1 aged person). ‘The government generates funds from the taxes paid by the people. With Japan experiencing a decline on its population less would be workers and less would be taxpayers. Which means there would be less funds for the needs of the people, according to Mr. Arakawa. In the study conducted by Horlacher and MacKellar, the benefits of children are not what they once were in Japan. Already fewer than half of elderly women live with their children. Furthermore, the steady improvement in public and private pension schemes has dramatically reduced the proportion of couples that plan to rely on their children for old-age support. Whilethe value of children as a source of old-age support has been declining, the direct and opportunity costs associated with childrearing have been increasing. Though the Japanese Government provides monthly allowances for children, they do not cover the costs of having a child. In the near future it is likely that the domestic market would shrink because there would be lesser successors for business conglomerates. There would also be less money in circulation because the aged and the aging population have their own savings in their own homes, instead of placing it in banks, according to Mr. Mizusawa, According to Horlacher and MacKellar, the changing age structure will have three major impacts on Japan's productive capacity. It will reduce rates of saving and capital accumulation. It will shrink the labor force. Finally, population aging may slow the growth in total factor productivity. A number of projections were made by different researchers regarding the future of Japanese saving rates. All the researchers came to a conclusion that the savings rate of Japan would decline by the turn of the twenty-first century. Horioka (1989), for example, projected that Japan's saving rate would become negative early in the twenty-first century and fall to levels between -10 and -20 percent of personal income throughout the first half of the century (see figure 4.3). Figure 4.3. Projected personal savings rate of Japan (1985-2050)Per cent of imeome Year Source : Horioka (1989) Population aging in Japan will have contradicting effects on its domestic investment. A decline in labor force may stimulate the demand for labor saving investment, on one hand, And the decline in profit rates would be a result of reduced labor supply and the higher interest rates may discourage investment, on the other. Auerbach etal. (1989), found that the decline in saving will ultimately outweigh the decline in investment and Japan's current account surplus will eventually become a current account deficit. In a multi-country simulation analysis, Masson and Tryon (1990) found that between the periods of 1995-2025 the current account/GDP ratio would fall by 4 percent. In the process of declining by this much, the current account balance would be negative by 2000 and would continue to fall until at least 2015. Higgins and Williamson (1996) came to an opposite conclusion, They argued that the ic investment than on saving, increase in old age dependency rate has a greater impact on dome: Hence, the current account surplus of Japan is likely to grow. Williamson and Higgins (2001)predict that between 1990 and 2025, the share of the current account balance in Japan's GDP will increase by 2 percent. At this point, there seems to be no consensus on the effect that population aging will have on Japan's future stock of foreign or domestic capital. Figure 4.4. Labor force growth rates, Japan (1980-1990 to 2010-2020) zk £ 1980-1990 1990-2000 2000-2010 2010-2020 Source : Yashiro (1997) In figure 4.4 it can be seen that the major economic growth in Japan occurred in the latter half of the years 1950 and 1960 when the labor force was growing rapidly and were relatively young. At that point in time, employers were able to employ many well-educated young workers who were able to work for a low wage. Japan's economic growth was a result of low wage workers with high levels of education. Between the years 1970 and 1988, the proportion of workers who had completed college courses more than doubled. Economic development was a result of this development. However, in turn this development also came with other results such as changes in household composition,education and social welfare systems. Figure 4.5. Labor force participation rates, age 15 and above, Japan (1960-2000) 100 —— Mates 9 a Females Per cent o4 no 4 1960 1970 1980 1990) 2000 Year Source : National Institute of Population and Social Security Research (2001). Japan's baby-boom generation entered in 1947. In 2007, this generation began to retire. In the short term, they can be re-hired for several years. However, they will eventually retire, and this means a persistent shortage of employees. The Japanese retirement age, when workers can start receiving pensions, is gradually being increased. Fortunately, older Japanese employees tend to be relatively enthusiastic about continuing to work past age 60. Japanese often see their work as a source of pride and like to be able to keep busy after retirement. According to the Japan Institute for Labor Policy and Training, 60% of workers say they want to continue at the same job after they turn 60. (Gross & Minot, 2008) Illustrated in figure 4.5 is a significant decline in the labor force participation rates (LFPR) of Japanese men compared to a small decline in Japanese women, There was a decline in the LFPR of young people aged 15 to 19, which was partially offset by a substantial decreasein the LFPR of unmarried women aged 25 to 29. ‘Compared to other developed countries the LFPR of elderly males in Japan is, significantly high (see figure 4.6). Though there rates have been decreasing (see figure 4.7). Yashiro, et al. (1997) suggest that the LFPR of older workers may increase as a result of the 2000 pension reforms, which reduced benefits and increased the age of eligibility for public pensions to 65. Figure 4.6. Labor force participation rate of older males, Japan and selected developed countries (1996) 7 4 Deer 60 4... ee so 4 4o 4 a 30 20 Per cent T T Japan United States Canada Germany France Source : OECD (1997). Labor Force StatisticsFigure 4.7. Male labor force participation, aged 60-74, Japan (1960-2000) 10 — Anes wo Age 68-69 — Ano Percent o4 T Source : National Institute of Population and Social Security Research (2001). Before, the distinguishing features of the Japanese labor market were seniority-based wage system and lifetime employment. There were institutions that provided workers with job stability and employers with high levels of effort and low turnover. At that time, the seniority based wages worked well with the rapid growth of the labor force. Then, a large percentage of younger workers were receiving less than their productivity were supporting deferred payments, toa smaller group of older workers who were receiving more than their productivity warranted. Since older workers were being paid more than their productivity, employers needed a system of mandatory retirement. In the year 2000, more than 99 percent of firms had set the mandatory retirement age at 60. However, more than 70 percent of those firms allowed some workers to continue past the mandatory retirement age or re-employed them at a much lower pay (20 to 40 percent). The reduction in the wage for elderly workers enticed the employers to employ elderly workers, The age of eligibility for public pensions is gradually increasing to age 65, which wouldresult to difficulties for workers who were subject to mandatory retirement at age 60 and who are unable to find re-employment. Even now, elderly men suffer from 10 percent rates of ‘unemployment in Japan. Japan's labor force is projected to fall rapidly in the years to come. Other than the decrease in the working population, hours per month and LFPR are also declining, Furthermore, Japan can no longer assume that its labor force will be fully employed. Since the labor supply is more than likely to fall and the rate of capital formation is subject to stagnate, the chances of maintaining economic growth in the twenty-first century would epend crucially on accelerating the rate of growth of productivity. Suggested p J changes Figure 5. Minor themes “Aging population of Japan Suggested changes / policies Change conservatism, Better utilization of young workers Family support systems Figure 5 shows the minor themes of the major theme that is the “suggested changes orpolicies.” These themes are further explained on the table and statements below. ‘Table 4. Suggested changes or policies BASIC THEMES, ORGANIZING THEMES. GLOBAL THEMES: * Change Japan's exclusive | — Change conservatism and superior attitude and admit or accept foreign workers. * With better, improved and | ~ Family support systems established family support systems more people would be encouraged to build and establish families. * The Japanese should — Family ties realize the idea of strong family ties Suggested changes or policies Table 4 narrates or summarizes different changes or policies that are suggested in journals, and books and by the different interviewees. To be able to make up for the decrease in young workers the Japanese should change itsold tradition of exclusivity and superiority. The Japanese has always been exclusive and proud of their culture that only a few Japanese speak or know how to speak English. They have also viewed themselves as belonging to a superior race. They view that an admission of foreigners would pollute their culture, customs, tradition and their race as a whole. However, to have a better economy the Japanese should consider accepting immigrant workers to help them sustain their economy and improve their population by granting citizenship among the immigrants. ‘These statements were said by three of our interviewees Mr. Dennis Coronacion, Mr. Maki ‘Mizusawa and Ms.Mariko Tojo, Improvement and development on family support systems such as retirement homes, health care facilities and day care centers would encourage the Japanese to establish a family. According to Ms. Tojo and Mr. Arakawa, the retirement facilities in Japan are not enough to accommodate all of the elderly. That is the very reason why there are overseas retirement homes that are being built funded for by private enterprises. The retirement facilities in Japan are according to Mr. Arakawa are only for leisure and there are no home care facilities. There are a few government ran home care facilities to accommodate the Japanese elderly who cannot afford to live in other countries. However, to be able to be admitted to these home care facilities it requires a tough selection. According to Mr. Arakawa he thinks that the government should make a law that would require the Japanese to produce 2-3 children per family so that there would be a significant increase in the younger generation to make up for their decreasing population. For the Japanese to be able to be enticed to establish families there should also be “free education” for the children. With free education parents would be able to send their children toschool and cut down on their expenses as well. ‘The Japanese should instill in theit minds the importance of a family, just like in the Philippines. They should consider the idea that by the time that the younger generation without establishing a family when they enter the aged population there would be no one to take care of them, according to Mr. Mizusawa. The aging population of Japan could be prevented by allowing increased intemational migration. However, such migration is not currently permitted nor is it likely to be permitted in the future. The United Nations (2001) has calculated that Japan would have to admit an average of 10 million immigrants per year over the next 50 years. Though such an inflow would maintain the age structure, it would result in the growth of the total population to 818 million in 2050. There are some signs that Japan may be warming to larger numbers of immigrants. Ina December 2007 poll by the Mainichi Daily News, nearly two-thirds of respondents said they supported allowing unskilled workers into Japan. Currently, only skilled workers are allowed. However, Japanese continue to prize their country’s ethnic and linguistic homogeneity. To make up for population decline, Japan would need to Import 300.000 to 400,000 foreigners a year until 2050. Japanese ate not likely to be open to such a high level of immigration. (Gross & Minot, 2008) Some Strategies for success as foreign HR professionals deal with Japan's demographic crisis from the Employee Benefit News on their special article on “Effects of Japan’s Aging Population on HR management and benefits similar to U.S Experience” include: + Making efficient use of older employees’ skills and making sure they are treated well.+ Being receptive to elderly jobseekers or secking them out when they have in-demand skills. + Overhauling private pension systems so that the rising percentage of older workers does not become a huge burden. + Importing more foreign workers and seeing that Japanese employees work well with them. + Incorporating women into the workplace on an equal basis and working to retain them even after they have children, Raising the birthrate is effectively the only other option, say observers. A big increase in child allowance was a central pillar of the Democratic Party of Japan's (DPJ) manifesto when it won its historic election victory in 2009. However, due to the dire national finances, the new government has so far only paid out half the promised 26,000 yen (about $340) a month to the parents of each child under 16. And following the damage to the economy from the March disasters, the DP] has cancelled plans to increase the allowances, and is instead considering cutting the payments to wealthier families. "I'd have as many kids as I could if I believed the government would pay the full amount of child support they promised and protect my rights at work,” says Misako Matsumoto, a childless Tokyo office worker. Creating a more female-friendly work environment in Japan would appear to be an obvious answer to nudge the economy: tapping the vastly underutilized half of the workforce when labor is in short supply, and encouraging women to have more children in the knowledge they could retum to work. But then education costs are increasing in Japan, regardless of income fluctuations, making it less attractive to have larger families. According to a study by the Organization for Economic Cooperation and Development(OECD) in 2005, public spending is the key to getting around the problems of opportunity and education costs. Fertility rates would increase to two children per woman if there was public support for day-care and education. The additional support for child care would push up the fertility rate and increase the labor participation of women. However compared to other societies, Japan still has a strong family and household structure. Many elderly parents continue to live with their children and grandchildren, and the burden of care will remain with women who are not in full-time work. The Confucian model of Japanese society has historically venerated and respected the old, In times past, very old people were rare, and they possessed wisdom and life skills from which the young could lear. Traditionally the wife of the eldest son, the first daughter-in-law, cared for her husband's aged parents, but times have changed with economic pressures. The eldest son is now experiencing difficulty in finding a willing marriage partner, as young women want to retain their working lives and have delayed child bearing. (Griffin, 1995)