Ruth Institute Blog

I’m seeing good articles like these more and more. Surely the citizens of these countries must know what’s up. But why aren’t they doing anything about it? Perhaps it’s the “someone else will solve the problem. I don’t have to do anything” mentality.

Steven Malanga

In Kamikatsu, on the Japanese island of Shikoku, officials have set up an agricultural cooperative whose members log on to computers daily to check the fluctuating prices of the produce that they grow. Then they go out and pick whatever is fetching the best price that day. Unusual, yes, but what’s truly surprising about this cooperative is the average age of its members: 70. In a country where lots of folks retire at 60, Kamikatsu’s residents are working well into their senior years—and they’re doing so not only to buoy retirement earnings but also to energize the local economy. With nearly half of the town’s residents 65 and older, the government realized that there simply wasn’t enough of a traditional workforce available to build or staff most typical industries.

Kamikatsu shows in microcosm what Japan and several other nations now face—and what others soon will. For decades, demographers and economists have watched the world’s fertility rate plunge as countries grew wealthier and more urban. These days, fertility rates in much of the industrialized world are far below replacement levels—that is, the number of kids that parents must have to replace themselves and adults who remain childless. Though the steepest declines happened first in wealthy countries like Japan, Italy, Germany, and Spain, even many developing countries have seen their fertility rates head downward.

The demographic shift brings extraordinary new challenges. Economists are increasingly recognizing that the struggles of places like Japan and Italy to extricate themselves from economic slumps that began in the 1990s result in part from extreme “birth dearths” that have shrunk labor pools, dried up consumer spending, and made businesses, staffed by older employees, more risk-averse. Decades of government efforts to reverse birth dearth have largely proved fruitless.

Keep reading.