An Analysis of the Relevance between the Transition of Japan's

Population Structure and Economic Growth:

Based on Grey Relational Model

Chunwei Mu

and Fenggang Du

School of Marxism, Dalian University of Technology, Dalian, China

School of Foreign Languages, Dalian University of Technology, Dalian, China

Keywords: Population Structure Transformation; Economic Growth; Grey Correlation Degree.

Abstract: Through the grey correlation analysis of the relevant index data of Japan's population structure and economic

growth from 1998 to 2018, it is found that the population age structure, gender structure and population

industrial structure are related to the comprehensive economic system. According to the research results, on

the basis of summarizing the experience of Japan's economic development, this paper puts forward some

countermeasures and suggestions for the coordinated development of China's population and economy.

1 INTRODUCTION

In recent years, some scholars have studied the

relationship between Japan's population structure and

economic growth. Min Lu, Fang Cai (Lu 2014)

believed that the impact of demographic changes on

the potential growth rate. After the 1990s, Japan's

demographic dividend disappeared, the absolute

number of its working age population decreased, and

the population dependency ratio increased. Through

direct and indirect ways, the transformation of

demographic structure led to the rapid decline of

Japan's potential growth rate after the 1990s.

Xiaofeng Wang, Xueli Ma (Wang 2015) based on the

data of economic growth and population age structure

changes since Japan entered the aging society, by

decomposing the contributing factors of economic

growth, pointed out that the improvement of labor

productivity is the main driving force of Japan's long-

term economic growth, and the reduction of working

age population will become an important structural

factor that has plagued Japan's economic growth for a

long time. Dangchen Sui etc (Sui 2020) research

found that Japan’s demographic transition has

undergone the first demographic dividend and the

second demographic dividend development stage,

and the declining birthrate and aging population have

https://orcid.org/0000-0003-1817-7480

https://orcid.org/0000-0001-6136-2425

become more and more serious. This change in the

demographic structure has had a greater impact on

Japan’s labor supply, savings, consumption and social

security system, and has hindered Japan’s economic

growth to a certain extent. Judging from the current

research, the impact of Japan's population structure

on economic growth is mainly concentrated on the

adverse effects of the population age structure,

especially the disappearance of the demographic

dividend and the increasing aging of the economy.

Changes in population structure not only refer to

changes in age structure, but also include sex ratio

structure, population industry structure, etc. These

elements are relatively lacking in previous literature

studies.

Based on the current research status, this paper

takes Japan as the research object, Study

demographic changes The relationship between (age

structure, sex ratio structure, industrial structure etc)

and economic growth is analyzed by using the grey

correlation analysis method. In view of the similarity

between China's population structure transformation

and economic growth model and Japan, at the end of

this paper, based on the experience and training of

Japan, this paper puts forward some countermeasures

and suggestions for the coordinated development of

China's population and economy.

Mu, C. and Du, F.

An Analysis of the Relevance between the Transition of Japan’s Population Structure and Economic Growth: Based on Grey Relational Model.

DOI: 10.5220/0011153800003437

In Proceedings of the 1st International Conference on Public Management and Big Data Analysis (PMBDA 2021), pages 181-186

ISBN: 978-989-758-589-0

181

Table 1: Indicators and codes.

index index

Proportion of population under 14

Y1 GDP

X2 Proportion of population aged 15-64 Y2 Output value of primary industry

X3 Proportion of population over 65 Y3 Output value of secondary industry

X4 Sex ratio Y4 Output value of tertiary industry

Number of employees in the primary

industr

Y5 Average household income

Number of employees in the secondary

industry

Per capita income of families with

children

Number of employees in the tertiary

industry

Y7 Per capita income of elderly families

X8 Total population

2 DATA SOURCES & RESEARCH

METHODS

2.1 Selection of Indicators and Data

Description

This paper takes the relevant data of Japan's

population and economy from 1998 to 2018 as a

sample to analyze the impact of population structure

changes on Japan's economic growth. The selected

indicators and codes are shown in Table 1.

Among them, the units of X1-X4 are %, the units

of X5-X8 are 10000 person, the units of Y1-Y4 are 1

billion yen, and the units of Y5-Y7 are 10000 yen.

The data selected in this paper comes from the

Japanese government statistics portal e-stat.

2.2 Establishment of Model

This study uses the grey correlation analysis method

to analyze the correlation between population

structure and economic growth. According to the grey

system theory, the grey correlation analysis method

mainly calculates the closeness of different data

sequences in a certain period, and then analyzes the

main and secondary factors affecting the system

change. Grey correlation analysis has the unique

advantages of requiring less sample data and low

requirements for data distribution characteristics,

which other mathematical statistics methods do not

have (Yuan 1991).

The specific steps are as follows:

1) Dimensionless processing of variable data. Due

different indicator units and different data

Figure 1: Population structure data of Japan from 1998 to 2018.

12500

12530

12560

12590

12620

12650

12680

12710

12740

12770

12800

12830

1000

2000

3000

4000

5000

6000

X5 X6 X7 X8

0,94

0,942

0,944

0,946

0,948

0,95

0,952

0,954

0,956

0,958

0,96

X1 X2 X3 X4

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182

Figure 2: Data of Japan's economic structure from 1998 to 2018.

dimensions, dimensionless data processing is

required before correlation analysis. The common

dimensionless processing methods mainly include

extremum, standardization, mean and standard

deviation. Standardized treatment is adopted in this

paper:

𝐹



𝑋



𝑋





  𝑚𝑎𝑥𝑋



𝑚𝑖𝑛𝑋



 (1)

2) The coupling correlation degree model of

population structure and economic system is used to

measure the relationship between population

structure and economic growth. The calculation

formula of correlation coefficient is as follows:

𝜉



𝑠 









|











|







|











|

|











|







|











|

(2)

Note: 𝜉 is the correlation coefficient between the

p-th population structure and the q-th regional

economic index in Japan at time s; 𝑋





𝑠、𝑌





𝑠 are

the standardized values of Japan's population

structure at time s and the economic indicators of the

q-th region; 𝜌 is the resolution coefficient, generally

0.5. After averaging the correlation coefficient

according to the sample number k, the correlation

degree matrix can be obtained, which reflects the

correlation between population structure and

economic growth. The expression of correlation

degree is:

𝛾









∑





 ,,⋯⋯,



,

(3)

3 RESULTS & DISCUSSIONS

This study selects 2018 cross-sectional data, and

through the comparative analysis of the correlation

degree, the correlation degree between the relevant

factors in the population structure and the economic

system relationship is obtained (the value is between

0 and 1); when the correlation degree takes the

maximum value of 1, it is explained A certain

450000

470000

490000

510000

530000

550000

50000

100000

150000

200000

250000

300000

350000

400000

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016

Y2 Y3 Y4 Y1

100

200

300

400

500

600

700

800

1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018

Y5 Y6 Y7

An Analysis of the Relevance between the Transition of Japan’s Population Structure and Economic Growth: Based on Grey Relational

Model

183

indicator of the population structure system has

exactly the same change law between a certain

indicator of the regional economic system; when the

value of the correlation degree is between 0 and 1, it

indicates that there is a correlation, and the correlation

increases with the increase of the value. The reverse

is also true; when the correlation degree is between 0-

0.35, the two systems are low correlation; when the

correlation value is between 0.35-0.65, the two

systems are medium correlation; when the correlation

degree is between 0.65-0.85 Sometimes, the two

systems are highly correlated; when the correlation

degree is between 0.85-1, the two systems are highly

correlated.

Table 2: Correlation coefficient matrix between population structure system and economic indicators.

ξ Y1 Y2 Y3 Y4 Y5 Y6 Y7 Average

X1 0.3764 0.8988 0.3814 0.3958 0.6455 0.4026 0.5188 0.5170

X2 0.3573 1.0000 0.3618 0.3748 0.5915 0.3809 0.4833 0.5071 0.5847

X3 0.9991 0.3572 0.9655 0.8839 0.4742 0.8518 0.5779 0.7299

X4 0.4217 0.7152 0.4279 0.4462 0.7914 0.4549 0.6090 0.5523 0.5523

X5 0.4011 0.7835 0.4068 0.4232 0.7218 0.4310 0.5670 0.5335

X6 0.4180 0.7260 0.4242 0.4421 0.7786 0.4506 0.6015 0.5487 0.5769

X7 0.8636 0.3382 0.8384 0.7761 0.4413 0.7513 0.5298 0.6484

X8 0.3546 0.9787 0.3590 0.3718 0.5839 0.3777 0.4783 0.5006 0.5006

Average 0.5240 0.7247 0.5206 0.5142 0.6285 0.5126 0.5457 0.5672 0.5536

Table 2 shows the correlation coefficient matrix of

Japan's population structure system and economic

system calculated by formulas. It can be seen from the

correlation coefficients between the indicators of the

two systems that they all belong to a medium or above

medium correlation, which shows that there is a close

relationship between the two systems:

First, the correlation coefficients between the

various indicators of the population age structure and

the comprehensive economic system are all around

0.5. Among them, the proportion of children aged 0-

14 (X1) and the proportion of youth aged 15-64 (X2)

are related to the comprehensive economic system.

The correlation coefficient of X3 is relatively small,

but the correlation coefficient between the proportion

of the elderly over 65 years old (X3) and the

comprehensive economic system is relatively large,

that is, it has the greatest economic effect. It can be

seen from Table Ⅱ that the proportion of elderly

people over 65 years old (X3) and the comprehensive

correlation coefficient of the economy have reached

0.7299, which has reached a relatively high degree of

correlation. The impact of the proportion of the

elderly over 65 (X3) on the economy is mainly

reflected in the GDP (Y1) and the secondary industry

(Y3), of which the correlation coefficient between it

and the GDP (Y1) has reached 0.9991, indicating that

the proportion of the elderly over 65 (X3) and the

GDP The variation law between (Y1) is basically the

same.

Second, the correlation coefficient between the

population sex ratio (X4) and the comprehensive

economic system is 0.5523, which has reached a

medium degree of correlation. The correlation

coefficient between population sex ratio (X4) and per

capita household income (Y5) is up to 0.7914.

Third, from the correlation coefficient matrix of

population structure system and economic system, it

can be seen that the average coefficient of population

industrial structure index and economic

comprehensive system index is 0.5763. Among them,

the average correlation coefficient between the

tertiary industry population (X7) and economic

system indicators has reached 0.6484, indicating that

there is a medium correlation between the tertiary

industry population (X7) and the economic system,

and it reflects the development of the tertiary industry

population It has a greater impact on the economy,

that is, the tertiary industry plays an important role in

the entire economy.

Finally, it can be seen from the correlation

coefficient matrix of population structure system and

economic system, the average correlation coefficient

between the total population (X8) and the indicators

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of the comprehensive economic system has reached

0.5006, and the total population (X8) is related to the

indicators in the economic system. The correlation

coefficients all exceed 0.35, and the correlation

between the total population (X8) and the primary

industry (Y2) exceeds 0.9, indicating that the total

population (X8) and the primary industry (Y2) are

highly correlated.

4 CONCLUSIONS

After World War II, Japan's economic development

experienced four stages: recovery, high-speed

growth, slowdown and stagnation. According to the

statistics of the comprehensive institute of social

economy of the Cabinet Office of Japan, the Japanese

economy has experienced 16 business cycles since

1951, when the post-war reform came to an end. From

the beginning of the bubble collapse in the early

1990s, the Japanese economy entered the long

stagnation period known as the "lost twenty years"

(more than 20 years now). It has experienced five

business cycles, of which, in 1998 and 1999, 2008

and 2009, the economic growth rate has been negative

for two consecutive years. According to the

prediction of the Japan Federation of economic

organizations and PwC, the Japanese economy will

remain in a depressed state in the next few decades.

The reasons for the long-term economic downturn in

Japan are manifold. From the results of the study,

besides the retaliatory influence of the bubble

economy, the change of population structure and the

adjustment of industrial structure are also important

factors. After entering the 21st century, Japan's

population growth rate has decreased significantly,

and there was a state of zero growth from 2007 to

2010. Since 2011, Japan's population has entered an

era of population reduction. In the process of slowing

down and even negative growth of the total

population, the most important feature of Japan's

population change is "young children aging" (Cui

2016). Japan has lost its "demographic dividend" due

to population reduction and rapid aging. Japan's

persistently low fertility rate has led to fewer children

and a reduction in the working population. In addition

to the low fertility rate, the aging of Japan's

population is also due to the extension of average life

expectancy. The characteristics of Japan's population

structure will comprehensively affect the economic

growth factors such as consumption demand,

investment demand, labor supply, capital formation

and technological progress. Due to the reduction of

demand in the short and medium term and the decline

of supply capacity in the medium and long term,

economic growth is bound to stagnate or show a

negative growth trend (Li 2016).

From the change of industrial structure, after the

1990s, the proportion of employment in Japan's

primary industry and secondary industry continued to

show a downward trend, especially in 2009, the

proportion of labor force in Japan's primary industry

was at a low level in the world. On the contrary, the

employment of all sectors of the tertiary industry is

relatively prosperous, and the labor force begins to

transfer not only from the primary industry, but also

from the secondary industry to the tertiary industry.

The output value of the tertiary industry and the

proportion of the employed population occupy a

dominant position, which plays a certain role in

maintaining stability of the Japanese economy.

Under the background of the continuous

weakness of the global economy and the slowdown

of productivity growth, the demographic factor, as a

structural factor affecting the economy, has attracted

more and more attention of policy makers all over the

world. Taking Japan as an example, China needs to

take positive population countermeasures to promote

economic development: Taking Japan as an example,

China needs to take positive population

countermeasures to promote economic development:

On the one hand, moderate population growth and

vigorous labor supply are important factors for

economic development. In recent years, China's birth

rate has continued to decline, even below the level of

population replacement. Therefore, China needs to

optimize its fertility policy, promote long-term

balanced population development, and improve

supporting measures by reducing the cost of fertility,

parenting and education. By formulating laws and

regulations, we will increase the population fertility

rate, slow down the aging of the population, delay the

negative growth of the population and improve the

population structure.

On the other hand, there is a close relationship

between the development of tertiary industry and

GDP growth. In order to effectively play the role of

the tertiary industry in promoting the economy, China

needs to continue to optimize the industrial structure

and promote the upgrading of the population

industrial structure. As an important part of modern

industry, the development of tertiary industry has an

important impact on employment, improving people's

life and optimizing economic structure. Since the

reform and opening up, with the evolution of China's

industry, the proportion of the tertiary industry in the

economy has shown an upward trend and developed

rapidly, becoming the main force to promote

An Analysis of the Relevance between the Transition of Japan’s Population Structure and Economic Growth: Based on Grey Relational

Model

185

economic growth. However, the employment

structure of China's tertiary industry is unreasonable

and needs to be optimized. In the future, it is

necessary to promote the coordination of industrial

structure optimization and employment

transformation to achieve sustainable economic

development. Scientifically promote supply side

reform, expand the contribution of consumption to

economic growth, and maintain long-term sustainable

economic growth under the condition of population

structure change.We hope you find the information in

this template useful in the preparation of your

submission.

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Dangchen Sui, Xu Cheng, Xue Wu. (2020) Demographic

Structure Change, Demographic Dividend and

Economic Growth--Based on the Comparison between

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Jiazu Yuan, 1991. Grey System Theory and Its Application,

Science Press, Beijing.

Min Lu, Fang Cai. (2014) The impact of demographic

changes on potential growth rates: a comparison

between China and Japan. J. World economy. 37, 3-29.

Xiaofeng Wang, Xue Li Ma. (2014) The Effects of

Demographic Factors on Japan's Economic Growthin

the Accelerating Ageing Period: a Perspective from the

Double Turning Points of Population and Economics. J.

Contemporary Economy of Japan .197, 1-12.

Yancui, 2016. Economic Growth and Business Cycle in

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Zhongsheng Li, 2016. Japanese Population Economy,

China Personnel Press, Beijing.

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