DAVOS, Switzerland (AP) – Aging populations threaten to slow economic growth in the world’s advanced economies and destabilize the banking system, the head of Japan’s central bank told an annual gathering of elites in the Swiss ski resort of Davos.
But Bank of Japan Gov. Haruhiko Kuroda said there were benefits, too: Faced with labor shortages as workers age and retire, employers are increasingly willing to hire women and to invest in labor-saving technology.
Thanks to a low birth rate, Japan’s population peaked in 2010. Kuroda said the shortage of workers hobbles economic growth. Slow growth pushes interest rates down and tempts banks to make riskier loans in a search for higher returns, “potentially making the financial system less stable.”
In response to the labor crunch, Japanese firms have been hiring more women. Earlier at the Davos summit, Japanese Prime Minister Shinzo Abe boasted that a record 67 percent of Japanese women either work or are looking for work, compared to just over 57 percent in the United States. Japanese firms have also aggressively invested in robotics and other forms of automation, raising productivity that feeds economic growth.
True, International Monetary Fund chief Christine Lagarde interjected, but “you can’t replace the entire Japanese population with robots.”
