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Japan is well known for being the most homogeneous developed country in the world, partially thanks to their extremely restrictive immigration policies. But does their economy or society suffer any drawbacks for having such laws, according to academic research?

I am aware that their economy has been shrinking since the 90's, but has it ever been shown that a low number of immigrants is to blame for it?

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    Have you researched the trend in the average age of Japanese workers. – Drunk Cynic Dec 20 '17 at 23:56
  • @DrunkCynic yes and I'm also aware that I'm migration could only solve that problem temporarily, as most immigrants adapt a similar birthrate to what's practiced locally. – JonathanReez Dec 21 '17 at 0:03
  • I think it is opinion based, at least the social part of the question. Is being the "most homogeneous developed country in the world" an advantage or a drawback? Depending on who you ask on the political spectrum, you will get very different answers. – Taladris Dec 21 '17 at 2:36
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    @JonathanReez: That the birth rates converge doesn’t matter. The issue is not a low birth rate per se, but a rapidly declining birth rate in the past that causes the population pyramid to be top-heavy. This can in principle be compensated for by “importing” younger people for some time. – chirlu Dec 21 '17 at 7:11
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    @Taladris I'm not sure it's opinion anymore at this point that multi-cultural societies have some severe downsides. Most of the conflicts in the middle east/Africa can be traced to arbitrary mergers of different peoples by colonial powers. It's equally questionable that immigration is a net boon to the host nation, every breakdown I've ever seen strongly suggests that non-skill based immigration is almost universally an economic negative for at least the 1st generation, for everyone besides the employers benefiting from depressed wages. – Jack Of All Trades 234 Dec 21 '17 at 15:37
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In this paper, they say that,

"The cause of the deflation was because the Japanese Corporations and Japanese banks had a relationship in which banks would lend out loans and not have a specific policy for collecting the loan back at a specific date and not charging an interest rate for late payments (Takafusa 1994, 142)"

and in this one, it says that,

"There were basically three causes of the banking sector crisis in the 1990s. First, bank loans were overextended particularly in risky areas with inadequate supervision and regulation over banks during the bubble period. Specifically, loan portfolios were concentrated in property-related businesses such as construction, real estate, and nonbank financial services. As most of these loans were collateralized by land whose values plummeted after the bubble burst, and cash flows were inadequate to repay the loans, these became nonperforming."

Both come to the conclusion that it was not the immigration at fault between 1990 and 2010. It was the bank's fault according to the first paper for not having a proper loan return policy and therefore not being able to get the loans payed back. The second one comes to a similar conclusion about the loan policy and mentions that the loans were concentrated in unstable investments and there was not enough profit to repay the loans.

Conclusion:

Both papers said that the decline was due to unstable investments paid for with loans from the banks which didn't produce any profits and created unpayable loans causing the economy to decline, not immigration policy

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Just because a lack of immigrants were not the cause of the crisis, does not mean they couldn't have been a solution, much like how medicine does not cause a disease, but it sure as hell can cure it. In that case, certainly one would classify one's inability to cure the disease as a drawback. Thus, the entire answer by that poster can be disregarded unless they can adequately posit that immigrants would not have made any difference during that period in Japan.

Further, the original question is not solely focused on the crisis, but asks in general what drawbacks there have been in Japan due to a lack of immigration.


Speaking generally, it is well known that Japan is an ageing society, by which I mean that in Japan, many people live longer. With 74.9 years, it has the highest life expectancy in the world. In 1950, 4.9 % of the Japanese population were 65 years or older. In 2015, that number was 26.7 %. In 2050, that number will be 38.8 %. This naturally poses a problem which many western countries are facing as well: the dependency burden. The burden is just a much bigger problem for Japan. For example in the United States, only 15 % of the population in 2015 was 65 years or older, substantially less than the Japanese number. For that reason, this is not a "future" problem for Japan either, it's already a problem and has been for a while.

So, how do you solve that problem? You ensure that your labor force is both strong enough and educated enough so adequate production can be reached. How do you do that? Well, have more babies, educate more people ... and immigrants!. This is where the immigration policy has been a drawback for Japan, and they realize it as well: immigration in Japan has skyrocketed over past few decades, so that they can increase the labor force.

graph of foreign share of Japanese population, 1970–2016

It is also likely that this dependency burden also played its role during the stagnation since the 2000s. The GDP per capita stagnated as we all know, but something weird was happening with the unemployment rate. You'd expect it to be rising during a crisis, yes? It actually fell:

graph of the unemployment rate in Japan

This suggests that jobs were largely available in Japan, and the immigrants that were being brought in (as indicated by the purple chart above) were being put to good use, which ties in nicely with the demographic analysis above. There are simply too many old people in Japan, so immigrants can come in, get a job easily, and take some of the burden and contribute quickly to the production. Had more immigrants been allowed in, both in the past, during this period, and in the future, obviously Japan would have been better prepared to face some of these issues.

This entire answer should of course not come as a surprise: the primary thing immigrants offer are labor supply, and a lack of immigration has thus one primary drawback: lack of labor. Duh.

You claim in the comments that this added labor would not solve Japan's problems permanently, since immigrants would adopt the birth rates of ethnic Japanese. First of all, Japan is not an ageing society due to their birth rate (which is actually on the rise either way, from 1.26 in 2005 to 1.5 in 2016), but due to their high life expectancy which itself is a byproduct of a culture that generally respects the elderly far more than western countries do. Secondly, almost all solutions in politics are temporary solutions. Thirdly, even if the immigrants brought in today soon whither away, they can just bring in more immigrants in the future.

  • Wouldn't bringing in adult foreign workers merely delay the ageing of Japan, rather than reversing it? That is unless you bring a million people every year, eventually fully displacing the locals. – JonathanReez Dec 21 '17 at 17:59
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    It's strange that you suggest a low birth rate isn't the cause of the aging population, but then cite a sub-replacement birthrate, which is generally accepted cause of an aging population(when combined with a high overall life expectancy). It's also not clear why you believe unchecked immigration(which has upfront, and hidden costs that tend to be ignored) is a better solution to a sub-replacement birth rate, versus bribing the native population to have more children. – Jack Of All Trades 234 Dec 21 '17 at 18:07
  • No, it won't, because as the level of education and technological prowess rises, industries become automatized and there's a lesser need for manual labor. The immigrants are supposed to solve a temporary problem, not one that will exist forever and ever. Even if the problem does happen to exist even many decades in the future, then obviously immigration alone will not solve the problem, and you are instead going to have to do stuff like paying people money to breed children and raise the retirement age. Immigration is not a permanent solution, but it is a very good temporary solution. – fede Dec 21 '17 at 18:08
  • Note that by "temporary solution", I mean a solution for decades and decades still. – fede Dec 21 '17 at 18:08
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    So an influx of unskilled laborers that you will be obligated to provide for decades after their usefulness has ended, adding to the mass of unskilled labor that won't be able to find jobs once more and more industries are automated. That sounds like a recipe for strife in the future, to solve a temporary issue that could probably be solved by increasing wages to attract more of their existing population into whatever jobs they are having trouble filling. Or subsidizing births to solve the problem in under two decades. – Jack Of All Trades 234 Dec 21 '17 at 18:13
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Japan’s fertility rate is below replacement level, i.e. there are more deaths than births. Combined with ever-increasing life expectancy this will result in Japan becoming a gerontocracy with a steadily declining population.

I haven’t researched this at all but it seems plausible that radically increasing skilled immigration could potentially make up for the low birth rate and contribute to holding off the stagnation and decline Japan faces if present trends continue unabated.

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