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The State of ImmigrationJapan

An Appointment with Demographic Destiny

Rules and cultural practices aimed at preventing Japan from becoming an “immigrant” nation make the country’s overall immigration policies “mostly unfavorable” to economic growth.

Japan has maintained, at best, an ambivalent attitude toward immigration. Because of low fertility rates and a sparse flow of immigrants, the population of Japan is expected to drop by 19 million people — about 15 percent — by the year 2050, falling from 127 million to 108 million.70 Exacerbating the situation is the fact that more than half of its population will be age 50 or older.71 The Japanese public is well aware of the demographic dilemma. In a Pew Research Center poll, 87 percent of Japanese said the growing number of older people in the country is a “major problem,” the highest of any nation surveyed.72

Projections that Japan’s population will plummet without a commitment to increased immigration have not changed the country’s policies. “The basic mindset in Japan is it’s not a country that accepts immigrants,” said James Dougherty, an attorney at Hikari Sogoh in Tokyo and a life-long resident of Japan with American-born parents. “Even with the concerns about population reduction, that has not changed.”73

The American occupying force after World War II established the basic structure of Japan’s immigration system. A 1989 law enacted reforms, and a 2012 law and recent revisions have sought to open the door wider to highly skilled foreign nationals, while maintaining restrictive policies toward lower-skilled workers and immigration more generally.

“Japanese society does not have a tradition like in America of Chinese-Japanese or Indian-Japanese,” said James Dougherty. “Here you are told to lose your previous identity.”74 But without increased immigration there will be fewer people to tell others to lose their identity — or to fill lower-skilled jobs and support government programs for the elderly.

Despite a general prohibition on the entry of lower-skilled workers, Japan’s policies are surprisingly open toward high-skilled immigration. Attorneys report low denial rates and no quotas for employers wishing to hire or transfer in high-skilled foreign nationals. Even policies on foreign entrepreneurs are moderately favorable.

The years of little to no economic growth have lessened pressure on the country’s leaders to open Japan’s doors wider to immigration. Japanese businesses are generally not active advocates for pro-growth immigration policies. If the policies of Japanese Prime Minister Shinzo Abe can spur the Japanese economy, then the greater demand for labor and the increase in job openings could encourage businesses to press for more favorable policies on lower-skilled workers and permanent residence. 

70. Rakesh Kochhar (February 3, 2014), “10 Projections for the Global Population in 2050,” Pew Research Center.
71. Ibid.
72. Pew Research Center (January 30, 2014), Attitudes About Aging: A Global Perspective.
73. Interview with James Dougherty.
74. Ibid.

Score Breakdown: Japan vs. United States

Attracting Foreign Entrepreneurs
Attracting Foreign Entrepreneurs
2.5 (vs. United States 1.5)

It is possible to qualify for the equivalent of an entrepreneur visa in Japan, but denial rates are high. 

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Hiring High-Skilled Foreign Nationals
Hiring High-Skilled Foreign Nationals
2.0 (vs. United States 2.0)

There is no annual quota on hiring high-skilled foreign nationals. The lack of a good system for permanent residence, as well as language and cultural issues, limits Japan’s ability to hire high-skilled foreign nationals on temporary visas.

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Hiring Lower-Skilled Workers
Hiring Lower-Skilled Workers
1.0 (vs. United States 1.5)

Japan does not have a category for lower-skilled workers.

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Lawful Permanent Residence For High-Skilled Workers
Lawful Permanent Residence For High-Skilled Workers
1.5 (vs. United States 2.5)

Most foreign nationals must be in lawful status in Japan for 10 years before they can gain permanent residence (three years if they enter via the points-based system). To become citizens, individuals must relinquish citizenship rights in other countries (no dual citizenship). The 10-year requirement before granting permanent residence is longer than in most advanced economies.

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Retention of International Students Postgraduation
Retention of International Students Postgraduation
2.5 (vs. United States 3.0)

Students are allowed six months after graduation to find work, but there is a 10-year wait before permanent residence can be granted (a three-year wait for permanent residence if eligible to use the points-based system). Cultural issues and not allowing dual citizenship for naturalization limit attractiveness for long-term stays. 

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Transferring High-Skilled Employees Across Borders
Transferring High-Skilled Employees Across Borders
3.0 (vs. United States 3.0)

Transferred individuals must be paid a salary equivalent to Japanese professionals; there is scrutiny as to whether a company in Japan is a true subsidiary of a company abroad.

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About the Report

Business Roundtable selected the evaluated countries based on five criteria:

1. Worldwide university rankings;
2. Per-capita income;
3. Gross domestic product growth rate;
4. Net migration rate; and
5. Research and development investment.

After comparing each advanced economy relative to the five criteria, the top 10 countries (including the United States) were selected for the study: Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland and the United Kingdom (U.K.). Not coincidentally, these are the countries with which the United States competes most for foreign talent, particularly in science and technology fields.

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