With the aid of examples, assess the challenges for countries at Stage 5 of the demographic
transition model. [15]
For countries at stage 5 of the demographic transition model (DTM), ageing populations are a
significant issue. This occurs when there is a rise in the median age of the population, where fertility
rates decrease, and life expectancy remains constant or increases. An example of a country in Stage
5 is Japan. It has the highest median population age, standing at 46, and over 30% of its population is
over the age of 60. The increasing death rates and decreasing birth rates mean that the general
population is declining.
One challenge experienced by countries in Stage 5 of the DTM is labour shortages. In Japan, there
are currently not enough people to fill all the necessary jobs being left by those who have retired.
This shortage can be seen in the agricultural sector. In 1985, 5.42 million people were employed in
agriculture. This figure decreased to 2.09 million in 2015, and around 65% of the people working in
farming were over the age of 65, a figure that has tripled in 30 years. This demonstrates the decline
in the number of people working in this sector and, with the increase in elderly people working,
shows the lack of economically active people in Japan who can take over in these positions. This
poses problems both socially and economically for the country. In the future, the country may
struggle to afford to look after the elderly in the population, due to a disproportionate amount of old
dependants in comparison to the economically active tax payers whose money would be used in
their care.
Increasing labour shortages in Stage 5 of the DTM can further lead to the decline in the quality of
goods and services being provided, such as health care services. With a lack of people to work in
hospitals and care homes, the services become overstretched, and in so may not be able to provide
the best quality care to those who need it. The lack of professionals paired with the increasing
demand for caregiving services due to the ageing population also leads to increase in the cost to
provide them. In 2018, Japan’s healthcare expenditure per capita was 4x greater on patients over 75,
amounting to ¥939 000 (£7,600). This money is provided through the taxation of the working
population, and if this too is declining, it provides concern for the future of the country
economically, as it will become harder to fund things such as pensions and healthcare due to the
increased demand on fewer taxpayers. This may force the people in Japan, who are already
overworked, to work past the age of retirement due to a lack of money in their pensions and the
demand for workers.
However, there are some solutions to the challenges facing countries in stage 5 of the DTM. In order
to combat labour shortages, the Prime Minister is introducing a schemed which has been named,
‘womenomics’. This is where companies are incentivised to hire more women and give more
leadership roles to them. This aims to increase the number of women who return to work after
having children into meaningful jobs and positions of power. This will help to increase the labour
force and output of businesses, encouraging women to work later on in life as well as encouraging
them to marry and have children as these will not burden their career prospects. This initiative also
aims to increase the birth rate by creating more flexible working environments and day-care options,
allowing women to balance having children and a career more easily. The ‘Angel plan’ in Japan aims
to assist parents in raising children by improving the affordability and access to day care and
parental leave. This will help to prevent further population decline and increase work force numbers
as mothers feel able to return post-pregnancy. As well as this, encouraging immigration of working-
age people to a country in Stage 5 can help to combat labour shortages
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