Despite the decreasing number of inhabitants, the population density in Japan remains to be one of the highest in Asia. The population is highly concentrated in metropolitan areas, most notably Tokyo, which is one of the world’s most populated cities, as well as Osaka and Nagoya. While many rural areas face depopulation tendencies, land prices in the three large metropolitan areas have been increasing again since the mid-2010s.
Until recently, the workforce in Japan was shrinking rapidly, putting pressure on the social security system. But continued employment of the elderly and the growing integration of women into the labor market have kept the labor force relatively stable and even led to a slight increase in recent years.
Aging population
Japan’s population currently is not only shrinking, but it is also one of the fastest aging populations in the world. At the same time, it has one of the highest life expectancies. The cohort of people aged 65 years and older consisted of around 36.5 million people in 2022 and was estimated to make up over 38 percent of the population by 2060. As a consequence of the country’s demographic changes, the Japanese economy today faces severe labor shortages, as is exemplified by a comparably low unemployment rate.Until recently, the workforce in Japan was shrinking rapidly, putting pressure on the social security system. But continued employment of the elderly and the growing integration of women into the labor market have kept the labor force relatively stable and even led to a slight increase in recent years.
