The other day, Japan's preliminary birth figures for last year (2024) were announced, revealing that the number was the lowest on record at approximately 720,988.
At the end of last year, there were predictions that the number would fall below 700,000, but it managed to hold steady. The trend in the number of births since 2015 is as follows. It has continued to decline every year, and the number of births in 2024 will be about 30% lower than in 2015.
Checking the results of last year's birth rate forecast
In fact, just around this time last year, we used time series analysis to predict the number of births in 2024 based on data on the number of births up to 2023. The prediction results using two methods, the "state space smoothing model" and the "ARIMA model", are shown below.
2024年始めに行った2024年の出生数予測Birth rate forecast for 2024 made at the beginning of 2024
Although the actual number of births was slightly lower than predicted, it was still possible to predict it with a certain degree of accuracy. In particular, the prediction error of the state space smoothing model was only -0.76%.
The prediction was made with such accuracy simply based on past birth data. However, when I think about Japan's future, I honestly wish this prediction had turned out to be wrong. The reality is that the birthrate is declining at a faster pace than the government had expected.
Since the number of births is heavily influenced by seasonal factors, we forecast it by month. Here, we compare the birth number forecast for 2024 using the state space smoothing model with the actual number of births.
Looking at the monthly figures, there are cases where the actual figures are higher or lower than the forecast, and cases where they are almost identical. In particular, for the three months from October to December, the actual figures (180,821 people) were slightly higher than the forecast (180,293 people). This may be a result that gives us some hope for the future.
Predicting birth rates in 2025 using JMP time series models
Now that we have data on the number of births in 2024, we tried to predict the number of births in 2025 (this year) using a state space smoothing model.
As in last year, the forecast is made in two steps:
Step 1. Determine the best model
- Using the years 2015 to 2023 as training data, 19 models are fitted using combinations of seasonal, trend, and error variations.
- Using 2024 as validation (holding) data, determine the best fit model using a statistic to evaluate the fit (RMSE).
Step 2. Use the determined model to forecast to 2024
The optimal model determined in step 1 is applied to the data from 2015 to 2024 to predict the year 2025.
The forecast results using the optimal model obtained through this procedure are shown below. The orange part of the figure shows the validation data for 2024, and the green part shows the monthly birth rate forecast for 2025.
Based on these results, the number of births in 2025 is predicted to be 686,798. This means that the number of births is expected to finally fall below 700,000.
Will the declining birthrate be halted?
As this forecast indicates, the number of births in 2025 is likely to fall below 700,000, but there is one positive sign.
It was found that the number of marriages last year (2024) increased by 2.1% (approximately 10,000 more) compared to the year before last (2023).
These numbers of marriages include remarriages, so an increase in the number of marriages does not necessarily translate into an increase in the number of births. However, this data does give us some hope.
The government is making serious efforts to combat the declining birthrate, but the effectiveness of these measures is now being questioned. I hope that the national and local governments will work together to create an environment in which it is easy to have and raise children, so that next year's results will defy current predictions in a good way.
by Naohiro Masukawa (JMP Japan)
Naohiro Masukawa - JMP User Community
*Addition: Using Prophet, a time series forecasting library developed by Meta, the predicted value for 2025 was 687,554 people. This is close to the predicted value using the state space smoothing model above.
