Dependency Effects of Internal Migration on Receiving Areas in Japan: A Labor Productivity Perspective

Xiaofei Wang , Beijing Foreign Studies University

Japan is now experiencing a complex situation of accelerated aging coupled with large-scale labor force migration. New features arising from dependency ratio caused by migrant population have attracted lots of attention. In this paper, we used prefecture data from Japan National Bureau of Statistics to estimate the differences in labor productivity implied by differences in the age structure and education attainment. Furthermore, instead of using the conventional age dependency ratio, we constructed an innovative indicator called productivity weighted labor force dependency ratio (PWLFDR) to reflect the economic burden posed by the migrant population in the receiving areas. We found that youth (aged between 20-29) and adult population (aged between 30-49) with higher labor productivity are the main variables determining the dependency burden of migration. For more economically developed areas, the productivity-weighted labor-force dependency ratio (PWLFDR) of the migrant population is lower than that of the conventional age dependency ratio, which only considers the share of overall working-age population and dependents.Therefore, the dependency ratio of the receiving areas can be mitigated by the higher productivity of the migrant population. This method provided us with a new perspective to study the effects posed by aging population. Our findings provided scientific insights for future evidence-backed, forward-looking policy design to address the negative impacts of demographic aging. Countries facing the severe challenges of aging can address this issue by attracting working-age population, especially highly skilled migration, and adult and youth population with relatively high labor productivity to reduce the negative effects caused by aging.

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 Presented in Session P3. Migration, Economics, Policies, History