Issue Labor shortages from a shrinking working-age population

Summary

The report sums up the population crisis of Japan and Korea as shrinking populations combined with soaring old-age dependency, caused by population ageing that ultra-low fertility has brought since the mid-twentieth century. The first economic consequence it identifies is a labor shortage caused by population decline, especially the fall in the working-age population. Responses include greater use of robots and artificial intelligence, drawing on underused labor and extending the retirement age, and more migration from abroad. The report treats this as one of three economic problems generated by the demographic crisis, together with fiscal strain from welfare costs and local extinction. It frames such measures as adaptation, arguing that the effects of low fertility will persist for a long time even if birth rates were to rise at once.