Japan's Demographic Nightmare Illustrated In An Exquisite GIF

Shane FerroNov 20, 2014, 02:02 IST

Japan has a demographic problem, which has become an economic problem.

The population is gradually getting older, people are having fewer children, and the ratio between prime age workers and retirees is shrinking. That means less consumption, more fixed incomes, and a greater need for government benefits. Prime Minister Shinzo Abe has a steep uphill battle ahead of him when it comes to trying to grow GDP.

Jim Laird at Laird Research has a great post on his site showing what Japan's demographic changes look like visually (in addition to a few other countries). Notice that we're nowhere near the worst of it: the young working population is estimated to continue shrinking long into the future.

Contrast this with a growing country like Nigeria:

The thing about these broad demographic trends is that they have a lot of momentum behind them, and are therefore basically unchangeable in the medium term without major changes in immigration policy. Even if prime age workers in Japan started having many more children, it would be at least 25 years before the economy saw that benefit.

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Japan's Demographic Nightmare Illustrated In An Exquisite GIF