Not only is the population shrinking, it is also aging. With one of the highest life expectancies in the world, the age cohort of 65 and older doubled from 1970 to 1994 and is estimated to make up for more than 35 percent of the population by 2060. This leads directly to another issue: labor shortage. Until recently the workforce in Japan had been shrinking rapidly, putting pressure on the social security system. But continued employment of the elderly and growing integration of women into the labor market have lately kept the labor force relatively stable and even led to a slight increase in 2017.
The population in Japan appears largely homogenous compared to many other countries around the world. Yamato people, a term used since the 19th century for the ethnic group native to the Japanese archipelago to distinguish them from minority groups, such as Ainu, Ryukyuans, or Koreans and Taiwanese who had settled at peripheral areas of Japan, make up about 98.5 percent of the population. However, the number of foreign nationals living in Japan has been increasing. Since this group consists for the largest part of skilled professionals and people younger than 65 years, it has also a positive effect on the shrinking workforce.
The Japanese population density is about 348 people per square kilometer, ranking 8th in Asia. It is highly concentrated in urban areas, with metropolitan Tokyo as the world’s most populated city, outreaching cities like Delhi, Shanghai or Mumbai. Land prices in urban areas increased sharply in the 1980s, forcing people to move to the outskirts of large cities and resulting in long daily commutes. It was not until 2000 and falling prices after the burst of the economic bubble, that residents have been moving back to the city centres.