Even though many media outlets would have us think otherwise, a country with a decreasing population can also have an increasing individual income. This is explored in the Utah Population and Environment Council White Paper, titled: Utah’s Fertility Decline: Richer Lives for All, Principal author: Stephen C. Bannister, PhD, Fall 2020.
A prime example for this assertion is Japan. As the 2020 White Paper states:
To be more specific, let’s look at Japan, the largest case (by GDP) of a nation with a declining population. …though total population levels in Japan are falling, living standards measured as GDP per capita continue to grow. By way of a direct comparison with our nation, since the economic collapse of 2007, Japan’s economy has grown 1.4 percent a year on a per capita basis. The American economy has grown .8 percent annually on a per capita basis (Baker 2019). Put another way, Japan’s shrinking population is getting richer — and even richer than the U.S.’s. The good news is that we thus need not fear the nearly inevitable spread of Japan’s phenomenon of wealth gains combined with a shrinking population to the rest of the developed world.
Japan offers the most clear-cut example of this phenomenon because its population has actually declined; many other advanced nations have not yet seen absolute population declines, but their demographic and per-capita growth charts point in the same direction. The larger context is that per capita economic growth no longer consistently correlates with population growth, and certainly is no longer dependent upon it, if it ever was! We all can become richer as traditionally defined even while embracing a smaller population.
Recently Japan has been in the news regarding its decreasing population. One question raised is whether Japan’s individual income is still increasing while the population continues to decrease. The short answer is yes.
Of course, there are all kinds of nuances and potential concerns about a decreasing population. Newspaper articles can lead one to think that the decreasing population in Japan is a catastrophe. For example, Newsweek had this recent article titled, Japan’s Population Crisis Worse Than Expected, Births Data Shows, By Micah McCartney, March 04, 2026. And from CNN last year is this, “But each year, fewer babies are born, and more deaths are recorded – a vicious cycle and a symptom of a population skewing older and older.” Japan’s population decline keeps getting worse. Last year, it saw a record drop | CNN. August 7, 2025.
Interestingly, a copilot search from Microsoft provides a more thorough and less alarmist view. Here is a summary: “Japan’s GDP per capita can rise despite population decline because of productivity gains, capital investment, labor participation gains, and labor market tightening, but these benefits are temporary and come with structural and demographic trade-offs.” From Japan population is decreasing, but individual IGDP is increasing – Search
Recently, Population Connection Magazine provided a fairly detailed and informative article titled, The Case for Gradual Population Decline. Written by Adair Turner, it was published June 8, 2026. The beginning summary of the article states: “Contrary to conventional wisdom, rapid population growth rarely delivers demographic dividends, while low fertility rates do not necessarily lead to stagnation. In fact, persistently high fertility often exacerbates underemployment, limits investment in education and infrastructure, and entrenches poverty across generations.”
The article then explored the various issues of population decline under the following headings:
- Too few workers?
- The AI acceleration
- Too few innovators?
- Demographic dividends and delusions
- How population growth fuels cost-of-living increases
- Why population decline could reduce inequality
- Smaller population, healthier planet
- Freedom to choose
The article concludes by saying: “Even with effective policies, fertility rates are unlikely to rise above the 1.5–1.9 range observed in many developed countries over the past 50 years, including those with excellent childcare systems and abundant land for housing. Rather than being feared, this outcome should be celebrated as the hallmark of a prosperous society where people are free to decide how to live their lives.”
In closing, many in the press and others can be quite alarmist. The decreasing population in Japan, and in other countries, will result in some concerns that will need to be addressed. And hopefully the strong possibility of many positive outcomes will be given as much or more airtime as the concerns. Overall, a decreasing population can be viewed as a positive development.
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