Population Aging and Japanese International Travel in the 21st Century

Abstract

Given Japan's role as one of the world's leading touristgenerating countries and its relatively low overseas travel propensities, travel forecasters believe that significant potential remains for increases in Japanese overseas travel. Yet, Japan's demographic transition into the world's fastest aging country could spell an end to the postwar boom in Japanese overseas travel. This article extends the research on the economic determinants of travel demand to explore the effects of demographic change. The authors, using pooled cross-section time-series data (1968-1995), show that age and cohort membership are significant determinants of Japanese international travel demand. Given reasonable assumptions about future real wage growth, labor force participation, and currency exchange rates, they demonstrate that increasing numbers of Japanese will travel abroad in the 21st century, although at a much slower pace. They also demonstrate the benefit of analyzing travel propensities for men and women separately.