A Nation in Decline: Exploring Immigration as a Solution to Japan’s Demographic Crisis

This thesis assesses the role of immigration in the economy, particularly as a potential solution to the demographic crisis in Japan. Using data from the United Nations and the World Bank, I conduct a comprehensive panel study of ten countries and regions over the time period spanning 1960 to 2023. My goal is to test the relationship between immigration levels and economic performance, focusing on GDP growth and unemployment rates as key indicators. Regression results reveal that higher net migration rates are associated with modest but statistically significant increases in GDP growth, and measurably significant decreases in unemployment. These findings support the notion that immigration can help mitigate the challenges posed by Japan’s shrinking and aging population, while fostering overall economic growth.