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Japan – Worker shortage could reach 11 million by 2040, report finds

Japan – Worker shortage could reach 11 million by 2040, report finds

April 3, 2023

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Japan may face a shortage of 11 million workers by 2040, according to a study by independent think tank Recruit Works Institute.

According to the findings, the labour supply, which was approximately 65.87 million in 2022, will decline to 63.37 million in 2030. By 2040, the labor force will shrink by 12% down to 57.67 million as the working-age population declines sharply.

The study notes that by 2030 there will be a labor supply shortage of 3.41 million people and over 11 million by 2040. Meanwhile, labour demand will remain flat in the future, according to the report, as the elderly population is estimated to peak in 2042.

Nearly all of Japan will experience the shortage with the exception of Tokyo. The supply shortage will be high beginning from 2030 at an average rate of 30% year-on-year but starting from the latter half of the 2020s the shortage of workers in the life maintenance services will be felt. Prefectures like Hokkaido, Miyagi, Saitama, and Okayama will show this trend.

By occupation, the labour shortage will mostly be felt among workers in life maintenance jobs in 2040, such as nursing care services at 25.3%, healthcare professionals at 17.5%, and transportation such as drivers who transport patients at 24.2%. Other occupations include construction at 22%, production at 13.3%, and administrative/clerical such as desk workers at 6.8%.