After decades of high growth, Japan’s economy slowed down in the early 1990s and has never really returned to old growth rates. Many people have proposed explanations for this, and one of them is shown in the graph above: an unusual drop in the employed population, which has to do with Japan’s substantial demographic changes. The working-age population has actually been declining since 1997, with no sign of reverting soon. For economic growth to occur in this environment, productivity improvements must increase faster than the workforce decreases. These data come from the Penn World Tables, which provides main economic aggregates for almost every economy of the world, while attempting to make them comparable in definition and in measurement units.
How this graph was created: Search the Penn World table for the “Japan” tag. Select the series and add to a graph. Select the right axis for one of the series.
Suggested by Christian Zimmermann.