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Prof Yuta Suzuki
Assistant Professor of Economics
Shanghai Jiao Tong University

This paper analyzes the spatial heterogeneity of population aging and decline in Japan, revealing a stark contrast between rapidly aging rural areas and expanding metropolitan regions. Using spatially disaggregated data and a dynamic life-cycle spatial general equilibrium model, we show that depopulation is driven by out-migration and low birth rates, further exacerbated by lower productivity and declining amenities. Our model projects that this unequal spatial trajectory of aging and population decline will persist. The resulting spatial inequality poses a significant challenge for the national government: sustaining local public services in aging areas is essential for the remaining elderly population, yet the required per capita fiscal transfers continue to grow. The findings highlight a fundamental trade-off between efficiency and equity: while population concentration enhances aggregate efficiency, maintaining population dispersion promotes spatial equity.