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News Release

Population Imbalances Due to Increasing Migration
- A Sharp Rise in Migration from Provinces to Cities Sets Alarm Bells Ringing -

August 1, 2008

Objective of this Report

In recent years, migration from provincial areas to Tokyo and other major cities has seen a significant increase. For this reason, it is highly likely that the imbalances in population will be still greater than suggested by the National Institute of Population and Social Security Research’s Population Projections by Prefecture. The outflow of population from the provinces saps the vitality of local communities and leads to subsidence in provincial economic infrastructures. In areas where the outflow is accelerating and population decline is more advanced, there will also be an impact on the building of social infrastructure for the future and on the sustainability of local government finances. As a result, the polarization between declining provinces and a flourishing metropolitan area increase still further, and Japan will become even more of a centralized state than it is today, with Tokyo supporting local government finances in the provinces. However, given the continuing concentration of the population in Tokyo and the severe problems that continue to face local government finances, it will not be possible to dispel skepticism as to the sustainability of such a state.

This report reviews the trends in population movement of recent years, with an eye to the self-sustainability of local communities, and considers directions for future government policy centering on population.

Overview

In recent years, Japan has seen a net outflow of people of working age from provincial regions, over a wide range of age bands. Reasons for this outflow include the fact that new graduates are showing an increased preference for employment with companies located in and around Tokyo area or in Aichi Prefecture, and job cuts at regional branches and sales offices.

If the migration becomes prolonged, it is likely that Japan will experience population imbalances even greater than those depicted in the National Institute of Population and Social Security Research's Population Projections by Prefecture, published in May 2007. Although the provinces are experiencing an outflow of people of working age, Tokyo and other major cities have seen no such fall in their "working-age population", which is set to remain constant or even rise.

Continued migration from provincial regions to Tokyo and other major cities will cause the provincial regions to lose the manpower required for future growth and lead to inefficiency of investment in infrastructure. Even if the population is concentrated in Tokyo, should the provinces continue to decline, Tokyo will need to achieve growth rates on a par with those seen during the "bubble economy" in order to sustain the economic growth of the country as a whole. To expect this would be unrealistic and from a medium-to-long term perspective, the centralized state model, where the population is concentrated in Tokyo, which single-handedly generates economic growth for the whole country, has reached its limits.

The local regions are highly likely to fall in a vicious spiral of population outflow , in which a population outflow triggers a slump in the local economy, bringing a further population outflow. To encourage as many young people as possible to stay in the provinces so that their activities can be harnessed for the regeneration of local communities, it is necessary to expand investment in the area and to secure employment, under local community leadership. The key to stopping the outflow of human resources from the provinces lies on the active investment by the government and private sectors with a view to retaining the younger generations through decentralized efforts based on their own original ideas, financial resources and methods.

For more information on the content of this report, please contact Takumi Fujinami, the Japan Research Institute, Limited.

Tel: 03-3288- 5331
E-mail:fujinami.takumi@jri.co.jp

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