Population ageing and economic growth in Japan

Purpose – The purpose of this paper is to determine how population ageing is related to economic growth as measured by real GDP per capita in Japan. This study is to address the following questions: first, how is population composition by age group related to economic change? Second, how is the dependency ratio related to economic change? And finally, what are the predictions for economic growth in the future? This study answers these questions in relation to Japan. Design/methodology/approach – Regression methods were applied to single-country data for the period 1975-2011. Findings – This study finds that an increase in the 70-74 population age group is associated with a decrease in economic growth, while an increase in the 75 and over population age group is associated with an increase in economic growth in Japan. Research limitations/implications – The relationships that were found in this study do not imply causation from demographic change to economic change. Practical implications – One potential way of promoting sustainable economic growth under conditions of population ageing is to devise a comprehensive policy that focuses on demographic factors. Originality/value – This study analyses population ageing and economic growth in Japan using single-country data by applying regression methods.