Business Statistics Report: Analysis of Average Age and Its Impact

This report presents a comprehensive analysis of population aging in Japan using business statistics. It begins with summary statistics of average ages in different countries, highlighting Japan's significantly higher average age. The core of the report involves a hypothesis test, comparing Japan's average age to the world average, concluding that Japan's average age is indeed significantly higher. The report delves into the causes of this aging, including low fertility rates and high life expectancy. It examines the consequences of an aging population, such as labor shortages and economic impacts. Furthermore, the report discusses government and social policies to tackle population aging, including encouraging elderly workers and immigration policies. Finally, it explores the impact of population aging on Japan's development, including the age dependency ratio and the need for elderly care infrastructure. The report concludes with a list of references and suggests areas for further research.

Running head: BUSINESS STATISTICS
Business Statistics
Name of the Student
Name of the University
Student ID

1BUSINESS STATISTICS
Table of Contents
Summary statistics of average age of all people in different countries...........................................2
Test for proposed hypothesis...........................................................................................................3
Statistical conclusion.......................................................................................................................4
Analytical conclusion......................................................................................................................4
Causes of higher average age of population................................................................................5
Consequences of aging population..............................................................................................7
Government and social policies to tackle population aging........................................................8
Impact of population aging on development of Japan.................................................................9
List of References..........................................................................................................................11

2BUSINESS STATISTICS
Summary statistics of average age of all people in different countries
Table 1: Descriptive statistics of age
From the summary statistics of median ages of different countries in world, the world
average age is obtained as 30.7 years. The corresponding standard deviation of ages is 8.89.
Different countries across the world has different average age depending on their specific

3BUSINESS STATISTICS
demographic characteristics. The median years in Japan is 47.3 years which is much higher than
world’s average age. There are various factors responsible for significantly higher average age in
Japan. The ageing population also save economic and social consequences.
Test for proposed hypothesis
Null hypothesis (H0): The average age in Japan is equal to the world’s average age of 30.7 years.
μ=30.7
Alternative Hypothesis (HA): The average age in Japan is significantly higher than world’s
average age.
μ>30.7
Level of significance
The chosen significance level for conducting hypothesis test of mean age is 5%. That is
α=0.05
Critical value
From the alternative hypothesis, it can be observed that the test is a one tail test
specifically right tail test (Larson and Farber 2019). The critical z value corresponding to 5%
level of significance is 1.645.
Test statistics
Since population standard deviation is known the appropriate test statistics for the test is z
statistics (Kaila 2017).

4BUSINESS STATISTICS
z= x−μ
σ
√ 230
¿ 47.3−30.7
8.89
√ 230
¿ 16.6
0.59
¿ 28.135
Statistical conclusion
The statistical conclusion is based on rejection or acceptance of the null hypothesis. For a
right tail test the critical region or rejection region lies to the right of critical z value. Therefore,
if the computed z value is greater than critical z then it falls in the rejection region meaning
rejection of null hypothesis that average age in Japan is same as the world’s average age (Fry
2019). From the test statistics the computed z value is 28.135. The critical z at 5% significance
level is 1.645. Computed z value exceeds the critical z suggesting rejection of null hypothesis.
The statistical conclusion therefore can be made in support of alternative hypothesis stating that
average age in Japan is significantly higher than world’s average age.
Analytical conclusion
In terms of aging of population Japan is ahead of almost all the nations in world. Japan
now is known to have the highest number of elderly population. Both rural and urban regions of
Japan are quickly experiencing super ageing of population. As per 2014 estimates, 33.0 percent
population in Japan aged above 60. People aged 65 or above constitute 25.9 percent of the
population and that of aged 75 or above comprises 12.5% of the population. People who are aged

5BUSINESS STATISTICS
65 or more now constituting one fourth of the population is expected to make up one third of the
population by 2020 (Theguardian.com 2019).
Figure 1: Population of Japan from 1920 to 2010 with projected population by 2060
(Source: Ipss.go.jp. 2019)
Causes of higher average age of population
One primary cause of population aging in Japan is that Japan has the lowest rate of
fertility in the world along with highest life expectancy.
Figure 2: Dynamics of birth rate and death rate in Japan
(Source: Ilcjapan.org. 2020)

6BUSINESS STATISTICS
High life expectancy
Japan has experienced a rapid increase in life expectancy rate since the end of World War
II. Because of improvement in nutrition and medical facilities average age increased to 50 years
for men and 54 years for women. There was a steady increase in proportion of population aged
65 years since 1950.
Low birth rate
Since 1974, the fertility rate in Japan reached to below replacement threshold of 2.1. In
2005 it reached to the historically lowest level of 1.26. Over time there was a major shift in
number of children and timing with total fertility rate recorded to be 1.41 children born/women.
Figure 3: Birth percentage to married women in different countries
(Source: Ilcjapan.org. 2020)

7BUSINESS STATISTICS
Economy and culture
During late twentieth century, there are number of cultural and economic factors leading
a decline in rate of childbirth rate. These include higher education, fewer and late marriage,
increase in number nuclear family, urbanization, poor balancing of work-life, increase in women
participation in the labor force and other.
Fatigue and overworked
A survey among Japanese women reveals that women in Japan are mostly fatigued and
overworked. This reduces their desire to involve any love relation resulting in further decline in
birth rate.
Consequences of aging population
Figure 4: Composition of demographic age in Japan
(Source: Katagiri 2018)
The overall higher average age in Japan reflecting in the demographic trend has an
inverse relation within and across the generations. This results in new responsibilities for

8BUSINESS STATISTICS
government and change in many other aspects of social life of Japan. The aging population is a
cause of great concern for future workforce of the country (Katagiri 2018). This in turn hampers
the potential future growth of the nation.
Figure 5: Real GDP growth rate in Japan
(Source: Katagiri 2018)
The fall in working age population results in a shrinking economy if productivity of the
nation fails to increase at faster rate compared to the decrease in workforce. Having an overall
high average years indicate a shortage of labor interrupting economic growth. Similar kind of
labor shortage in countries like Germany, Italy, Spain, Greece and Sweden is expected to lower
economic growth of European Union by 0.4 percentage point. In case of Japan the shortage of
labor depresses economic growth by 0.7 percent which further expected to reach to 0.9 percent
after 2025 (Miyabayashi et al. 2019). Faced with a shortage of labor most of Japanese companies
have increased the retirement age creating pressure on national pension system.
Government and social policies to tackle population aging
Increase in older population poses significant fiscal and macroeconomic challenge to the
society by increasing burden on government spending in areas like healthcare, pensions and

9BUSINESS STATISTICS
social benefits program. The diversion of government spending from education and
infrastructural development towards elderly programs hinder future economic growth of the
nation. Therefore policies should be undertaken to address the issue. One solution to the problem
of labor shortage due to aging population is encouraging elderly worker to remain in the labor
force for a relatively longer period (Hsu and Yamada 2019). Organizations should develop a
scheme where older workers can be allowed to stay in the labor force even by working for
relatively less labor hours. The policy of phased-in retirement include it benefits the government
with continuous tax revenue and lower burden on government expenditure in areas such as
pension, health and others. In situations where individuals are not able to take advantage of the
scheme phased-in retirement because of their family obligations or mismatch of skill,
government could then reward and promote volunteer working, artistic work and care work
among the elderly. In United States, nearly 25 percent of residents do volunteering contributing
service hours of nearly $7.9 billion and providing service worth nearl $184 billion. Another
alternative policy to compensate labor shortage is encouraging migration by relaxing
immigration policies. More open immigration policies have allowed countries like Canada,
Australia and United State to strengthen their workforce even with a low birth rate.
Impact of population aging on development of Japan
The higher life expectancy along with a lower fertility rate inverts the general population
pyramid resulting in a smaller base made up of young people need to take care older people in
the families. The age dependency ratio in Japan as estimated in 2014 was 40% which is expected
to become 60% within 2036 and that of 80% in 2060. The rising share of old age population
needs support in the form of building nursing homes, support of health care program, building
daycare centers and others (Lee and Mason 2017). Each year, Japan closes nearly 400 schools

10BUSINESS STATISTICS
(includes both primary and secondary) to convert them to elderly care center. This by hampering
education level lower economic growth and development of the nation.
Shifts towards a more open immigration policy as adapted by most developed nations is
one way to address the problem of labor shortage. Japan however has rejected such policy in fear
of increase in foreign crime and interruption in their racial and ethnic homogeneity.

11BUSINESS STATISTICS
List of References
Fry, G.S., 2019. Business Statistics A Decision-Making Approach. Pearson Education Limited.
Hsu, M. and Yamada, T., 2019. Population aging, health care, and fiscal policy reform: The
challenges for japan. The Scandinavian Journal of Economics, 121(2), pp.547-577.
Ilcjapan.org. 2020. The Aging Population and the Society [online] Available at:
http://www.ilcjapan.org/agingE/doc/POJ_2013_1.pdf [Accessed 29 Jan. 2020].
Ilcjapan.org. 2020. Publication ｜ ILC-Japan. [online] Available at:
http://www.ilcjapan.org/agingE/ [Accessed 29 Jan. 2020].
Ipss.go.jp. 2019. Population Projections for Japan [online] Available at:
http://www.ipss.go.jp/site-ad/index_english/esuikei/ppfj2012.pdf [Accessed 29 Jan. 2020].
Kaila, H.L., 2017. Textbook of Parametric and Nonparametric Statistics. Journal of
Psychosocial Research, 12(1).
Katagiri, M., 2018. Economic Consequences of Population Aging in Japan: effects through
changes in demand structure. The Singapore Economic Review, pp.1-23.
Larson, R. and Farber, B., 2019. Elementary statistics. Pearson Education Canada.
Lee, R. and Mason, A., 2017. Cost of aging. Finance & development, 54(1), p.7.
Miyabayashi, I., Washio, M., Yanagimoto, T., Fortin, E. and Yasumura, S., 2019. Population
Aging and Health of Older People in Japan: Introduction of Health Issues and Care System for
the Elderly. In Health Issues and Care System for the Elderly (pp. 1-16). Springer, Singapore.