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OECD Territorial Reviews: Japan 2016

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Japan is embarked on a demographic transition without precedent in human history: the population is both declining and ageing rapidly. This raises important questions about the country's future economic geography, as public policies will need both to respond to these shifts and also to shape them. Demographic change will have particularly important implications for the settlement pattern of the country, and this, in turn, will affect Japan's ability to sustain economic growth and the well-being of its citizens. This Review therefore focuses on the spatial implications of demographic change and the response of spatial policies to it, particularly as these interact with other policies aimed at sustaining the productivity growth that a "super-ageing" Japan will need in order to maintain its future prosperity. The Japanese authorities have recently put in place a complex package of long-term spatial and structural policies aimed at meeting this challenge. Their experience should be of first-order interest to other OECD countries, as most face the prospect of rapid population ageing and many are also projected to experience significant population decline over the coming decades.

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Japan's demographic transition and the productivity challenge

This chapter provides an overview of regional trends and challenges facing Japan. It begins with a look at the demographic and macroeconomic context, reflecting in particular on the implications of population ageing and decline for economic policy, especially efforts to enhance productivity. It then turns to an analysis of regional growth performance, inter-regional disparities and other socio-economic outcomes. This is followed by consideration of the economic policy response to demographic change at different territorial scales, from the national to the local, and an examination of the spatial consequences of Japan’s restructuring challenge. The primary focus of the discussion is on the interactions among demographic change, productivity performance and the evolution of the country’s settlement pattern.

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