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Is Japan's society making progress?

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Is life getting better? Are our societies making progress? Indeed, what does “progress” mean? These are some of the questions that OECD’s statisticians are now asking themselves.

For a good portion of the 20th century there was an implicit assumption that economic growth was synonymous with progress: an assumption that a growing Gross Domestic Product meant life must be getting better.  But it is not quite as simple as that. Despite high levels of economic growth in many countries many experts believe we are no more satisfied with our life (or happier) than we were 50 years ago. People trust one another - and their governments - less than they used to. And increased income has come at the expense of increased insecurity, longer working hours and greater complexity in our lives. Much of the world is healthier and people live longer than they did just a few years ago, but environmental problems like climate change cast a shadow over an uncertain future.

Let’s take a look at the case of Japan. Is its society making progress?

This country’s performance in the post-war economic recovery period was truly a miracle. But twenty years ago, it had a financial crisis. It then procrastinated for many years before fixing it, and ended up with a massive load of public debt. This is hardly a good idea for an ageing society which should be saving for its future.

For much of the 2000s, Japan enjoyed slow but continuous growth – only to fall over again last year. Looking back, it seems clear that Japan has essentially stagnated for two decades. So, it is not surprising that although Japan is still the OECD’s and the world’s second biggest economy, it ranks only 16th highest in GDP per capita among the OECD countries. Nevertheless, unemployment remains among the lowest of the OECD group, even if the share of irregular employment has shot up, and women and youth do not fare well in the labour market.

But, forgetting the economics for a minute, the Japanese have every reason to be happy. They have a beautiful country, with great infrastructure, everything works, the people are very polite and crime is very low. What’s more, Japanese men and women have the longest life expectancy among the OECD countries, coming in ahead of Switzerland, Iceland, Australia, Spain, Italy and France.

The remarkable gains in longevity in Japan in recent decades have been driven notably by falling death rates from heart diseases, which are the lowest now of all OECD countries, for both males and females. Infant mortality rates in Japan have also fallen dramatically in recent decades. The Japanese do not have to pay a fortune for their good health. Total health spending as a share of GDP is below the OECD average, and almost half that of the US which does much less well on life expectancy.

The Japanese are also in good physical shape, despite the prevalence of after work drinking by both men and women.  Japan has escaped the rise in obesity rates in nearly all OECD countries.  Only 3.9% of Japanese suffer from obesity (2nd lowest among the OECD countries, after Korea) compared with 34.3% in the United States.

But something is wrong in Japan. Despite their high life expectancy, few Japanese people actually think their health is good. Self-reported health in Japan is the 2nd lowest in the OECD after the Slovak Republic. After Koreans, Japanese sleep the least of OECD countries, only about 470 minutes per day. Japanese have among the lowest amounts of leisure time in the OECD, second only to Mexico. And some 41% of adult males smoke, the highest among OECD countries after Turkey, Korea and Greece. Is this why obesity is so low? If they would only relax, might they be as fat as the rest of us?

If we scratch a little deeper, we do see some more problems. While there has been some improvement over the past five years, Japan’s level of poverty (meaning people who live on less than half median incomes) is still the 4th highest across the OECD area. Since 1985, child poverty has increased from 11 to 14%, while poverty among people aged 66 and over has slightly decreased from 23 to 21%. This is still above the OECD average of 13%.

Also, household incomes have declined in the past 10 years. Lower income groups felt the pain most in the late 1990s, but rich families saw their incomes fall in the early 2000s. And income has become 30% more unequal since the mid-1980s, compared to an average increase in OECD countries of 12%. Only in Italy has the increase been bigger than in Japan.

Looking at all of this, it is perhaps not surprising that Japan’s birth rate has simply crashed from 2.16 in 1971, to 1.26 in 2005. Although it rebounded to 1.32 in 2006, it remains the lowest in the OECD area after Korea. This is a complex story which we will come back to on another occasion.

But there are many obvious reasons why I would not have a child in Japan. Economic and social life has become more precarious, after having been very safe and stable. Government debt and the financial costs of ageing populations only make the future look more bleak. As the government’s policies and infrastructure for older people are far from adequate, a lot of the burden of looking after them will fall on families.

Although the government is worried itself about the low birth rate, its political ineptitude is only a further source of more nerves. And looking just two years ahead, China might overtake Japan in the global GDP race – another source of uncertainty for life ahead. 

It's no surprise that the latest data show a jump in suicides!


Society at a Glance, OECD (2009)

OECD Health Data 2008

Growing Unequal?: Income Distribution and Poverty in OECD Countries, OECD (2008)

Measuring the Progress of Societies, OECD