This blog is part 2 in our series on population dynamics. Check out part 1 on visualizing aging population here. In this blog, we take a closer look at how India and Japan are aging, and uncover an astonishing trend through population pyramid visualizations.

There has been a lot of discussion on how Japan is dealing with an aging population crisis. The theory of demographic transition says that populations in a country undergo a transition from a period of high birth and death rates to one of lower birth and death rates, as the country progresses economically and culturally. To know more about how this transition actually happens, check out our blog post on aging population. Since Japan is one of the few countries that has currently reached the far end of this transition, it is interesting to see what India can learn from the Japan story.

Population Pyramids for India and Japan

We looked at age-wise population data from the United Nations Department of Economic and Social Affairs (UN DESA) for India and Japan. We first visualized the 2015 data for both countries in the form of population pyramids. A population pyramid (also called an age pyramid or age picture diagram) shows the distribution of males and females of different age groups in the population. The population pyramid is named so because it resembles a pyramid when the population is growing.

Population pyramid

A bottom-heavy population pyramid for India suggests a young and growing population. Japan, on the other hand, has a narrow base and wider top, as is typical of an aging population.

UN DESA has published population data for 1950-2015 and medium variant population estimates for 2016-2100. When we analyzed the data for India and Japan, we found an intriguing trend — India is mimicking Japan’s population growth trend, but with a 50 year lag.

Population pyramid

What Can India Do?

Japan is facing many consequences of an aging population — low GDP growth, a focus on markets (healthcare, insurance, pensions, and leisure) targeted to older citizens, high cost of child care, and high real estate costs, all amidst the backdrop of low immigration. In addition, there are significant cultural and psychological effects. Japan has seen many people living alone, especially working women and the elderly, and the rise of a “lonely children” dynamic where children do not have siblings. People are postponing marriage to pursue career growth and self actualization, and there is deep unease and fear about Japan’s potential economic collapse and loss of vitality.

Japan is boosting its birth rate by offering incentives in the form of cash, state-supported day care, tuition waivers and so on. Given that India’s population is already bursting at its seams, measures to increase birth rate are out of the question. As per UN DESA data, India’s population in 2015 is 1.3 billion, more than 10 times bigger than Japan’s population of 126.6 million.

What India can do is to ensure that it takes care of its soon-to-be-aging population at retirement. Countries such as Sweden and Poland have now instituted demographically indexed pension schemes to tackle their aging population crisis, which is a huge contributor to the countries’ economic deflation. India has always been a savings-oriented economy, but this is changing with the shift towards a more consumption-based lifestyle. Effective data collection and analysis on individual-level income, savings, and medical expenditure can add great value in urging policymaking in the right direction. Provident Fund accounts and state-provided medical insurance, for instance, can go a long way in ensuring that India’s economy is, at least, better financially prepared for an aging population crisis like the one in Japan.