This study examines long-term changes in regional productivity in Japan by analyzing real GDP per worker for all prefectures from 1975 to 2021 and real municipal GDP per working-age person for 29 municipalities in Mie Prefecture from 2011 to 2021. Using nationally deflated real output measures, the analysis reveals a consistent pattern across both prefectural and municipal levels: regions experiencing substantial declines in the working-age population often recorded notable increases in productivity. In contrast, major metropolitan prefectures such as Tokyo exhibited rising employment but only limited productivity gains. These findings challenge the conventional view that population decline inevitably leads to economic stagnation and instead suggest that demographic contraction may facilitate structural adjustment, adaptive resilience, and productivity enhancement in certain regional contexts. This multi-scale approach integrates long-term prefectural trends with detailed municipal-level dynamics, highlighting the importance of regional heterogeneity in Japan’s demographic and economic transitions. The study also acknowledges limitations related to data availability and the absence of region-specific price indices. Overall, the findings indicate that demographic decline and productivity growth are not mutually exclusive and that understanding regional adaptation to shrinking labor forces is essential for designing effective policies in an era of persistent population decline.
Norihiro Nishimura (2026) studied this question.