Aging and Economic Growth in Japan: Differential Effects of Multiple Generations

• Published in: Journal of population ageing 2022-03, Vol.15 (1), p.239-258
• Main Authors: Miyahara, Takashi, Adelaja, Adesoji
• Format: Article
• Language: English
• Subjects: Age differences; Aging; Baby boomers; Censuses; Demography; Economic development; Economic growth; Economic impact; Economics; Efficacy; GDP; Generation X; Generation Z; Generations; Geriatrics/Gerontology; Gross Domestic Product; Medicine/Public Health; Millennials; Social Sciences; Sociology
• ISSN: 1874-7884; 1874-7876
• DOI: 10.1007/s12062-020-09307-1

We combine Japanese Population Census, Prefectural Accounts Calculations and other Japanese government data sources to create a panel database covering 47 prefectures over the 2001 to 2014 period. We then used this data to investigate the role of societal and generational aging on national economic growth in Japan. Specifically, we estimate the impacts of multiple Japanese generations that are distinct in characteristics, tastes and experiences, and explore the trajectories of their economic impacts. Our findings suggest that as Generation Z, our base generation, ages, gross domestic product increases at a decreasing rate, peaking at age 39. This is conditional upon the distributions of other generations and their ages. Additional and differential growth effects of aging are attributed to the Baby boomer II, Generation Y, Baby boomer I and Generation X and the Yutori generations, vis-à-vis Generation Z. However, the aging of the Before baby boomer generation leads to slower growth than that of the Generation Z. Our results challenge the use of average societal aging variables and suggest the efficacy of models accounting for the aging of different generations. These results are useful in national policies to promote economic growth through age-specific strategies that target individual generations.