The Economic Toll of High Suicide Rates in Japan and South Korea

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Japan and South Korea have some of the highest life expectancies in the world — 83.3 years and 81.5 years respectively. However, they also have two of the highest suicide rates, especially among males. In 2013, male suicide rates were 41.7 and 26.9 per 100,000 in South Korea and Japan respectively — the first- and third-highest rates among high-income Organisation for Economic Co-operation and Development (OECD) countries. Further, while suicide rates are declining in many countries, they are on the rise in Japan and South Korea.

The main reasons for these high suicide rates include adverse economic conditions, unemployment, changing family structures, depression, inadequate access and resistance to mental health care, and substance abuse, according to “The Cost of High Suicide Rates in Japan and South Korea: Reduced Life Expectancies,” a research paper by Wharton student Elliot Oblander; Sojung Carol Park, associate professor of finance at Seoul National University in South Korea; and Jean Lemaire, Wharton professor of statistics and actuarial science. “Clearly, this is a major public health epidemic, which has a high impact on quality of life,” they write.

While quality of life is an abstract concept and the cost of any public health epidemic is difficult to measure, the paper suggests that life expectancy and impact on life expectancy can serve as proxies. “The life expectancy at birth is a widely accepted measure of quality of life in a society, summarizing in a single number all the natural and man-made damages that can affect an individual, ranging from poor health care systems and civil war to unhealthy nutrition and sexual behavior.”

The authors use actuarial multiple decrement techniques to measure the severity of Japan and South Korea’s suicide epidemics by calculating their impact on life expectancy at various ages. This, in turn, offers insights on how suicides affect quality of life for different age groups. The research shows “how much longer the already commendably long life expectancies of both countries would be without suicides.”

The paper found that suicides shortened the life expectancy at birth in Japan by 1.12% and 0.83% in South Korea. That translates to shortening the life of the average Japanese by 339.3 days and 246.6 for South Koreans. Broken down by gender, the study shows that men suffered more. Japanese men on average would lose 435.7 days and women 247.7 days while South Korean men lose 305.2 days and women 169.4 days.

There are differences among age groups as well. In Japan, suicide rates rise rapidly between ages 15 to 20 and stay roughly constant after that. In South Korea, on the other hand, suicide rates rise slowly but consistently from ages 15 to 65, and increase quickly after 65. This is primarily due to a rapidly changing social structure — multiple generations living together under one roof gave way to smaller families where the youth move away for jobs and school — and the erosion of the Confucian concept of “hyo,” or blind filial piety and respect to parents. These factors result in the weakening of family support.

Since Japan sees a higher suicide rate in younger age groups, there is a consequent larger impact on the quality of life at birth because the deceased individuals lose more years of potential life. In South Korea, the impact on life expectancy at birth is smaller due to suicides being concentrated around older populations. Impact peaks in Japan at 1.38% for ages 20 to 24, and then steadily declines. The impact in South Korea peaks for the 25 to 29 group at 1.06%, but stays fairly flat across all age groups, with a 0.80% impact on the 60-plus group.

High Economic Cost to Society

“Suicides at a young age have a major impact on the economy. Families and governments spend vast amounts on the education of children and young adults but do not reap the rewards of that investment since the young adults who commit suicide [do not have many] productive years. This deteriorates the dependency ratio (active population divided by non-active folks like seniors and young people), as active people bear the burden of caring for children, teenagers and seniors,” says Lemaire.

Pointing out that in all advanced countries the dependency ratio is deteriorating fast, and more so in Asian countries, Lemaire observes: “A life cut short by suicide further increases the dependency ratio, increases population aging, and modifies the age pyramid. Also, that person may have to be replaced by an immigrant, a delicate subject in South Korea and Japan.”

“Suicides at a young age have a major impact on the economy.”  –Jean Lemaire

Frequent deaths from suicide take a huge emotional toll on communities, adds Oblander. “Apart from the life that is cut short, the family and friends of the victim experience great grief. Economic productivity is also harmed from an emotional level, since suicide at a company affects company culture and morale. The phenomenon of ‘karōshi’ (death from overwork) in Japan is frequently reported in the news. At a company where employee suicide is a common occurrence, this is sure to adversely affect other employees.” Also, when an employee dies, potential years of productive work are lost, and filling the vacated position incurs search costs.

The economic impact due to suicides depends both on the age distribution of the suicides and the demographics of the labor force of the country in question, says Oblander. “For instance, Japan is already experiencing a labor shortage due to its aging population. Therefore, the loss of young lives has a huge impact on economic outcomes. In South Korea, on the other hand, suicide is more concentrated in older populations, and as noted in our paper, the retirement age is very early, so relatively few suicides occur among active labor force participants. As a result, economic impact is smaller in South Korea.”

Lemaire adds another perspective. “South Korea and Japan are among the countries with the lowest fertility rate. A fertility rate of 2.1 per woman is ideal, as it maintains a stable population and does not disturb the age distribution. Among 224 countries mentioned in the CIA’s World Factbook, Japan ranks 210 with a fertility rate of 1.41 and Korea 220 with a fertility rate of 1.25. It is hard to overestimate the dramatic long-term influence of such low rates in terms of population aging and disturbances of the workforce. I would therefore conclude that suicides have a larger societal impact in Japan and South Korea, as suicides amplify the gigantic effects of the low fertility rate.”

Preventive Measures

Increased accessibility to good mental health care, along with long-term cultural changes — in particular, stigma around mental health and unreasonable societal expectations of overwork — can help in reducing suicide rates in these countries, says Oblander. Better support for elderly citizens like enabling participation in the labor force and other forms of social engagement to counter the adverse impacts of early mandatory retirement and possible social isolation can also be effective measures, he adds.

“Economic productivity is also harmed from an emotional level, since suicide at a company affects company culture and morale.” –Elliot Oblander

Lemaire notes that less lethal prescription drugs (sleeping pills and anti-depressants), safer cooking gas and limiting access to high places have been effective preventive measures. “I believe that regulations have pretty much achieved all they potentially could. What remains to be improved is mental health. There is strong evidence to show that once suicidal persons have been identified, mental treatment can be very effective — there are few second attempts at suicide. The key is to improve early detection of depression, obviously not an easy task.”

Lemaire suggests that educators and medical professionals can play an important role in early identification of individuals with suicidal tendencies while governments can accelerate some aspects of cultural changes. He notes that when studying suicide rates across the world, broad groups of countries emerge. Suicide rates are low in Muslim, Hindu and Latin American countries, high in Eastern Europe and Asia, and in the middle in the U.S. and Western Europe. “Cultural changes in Japan and South Korea are occurring very fast. Some are destabilizing (breakdown of traditional family values, sense of powerlessness due to rapid globalization), while others are a step in the right direction. Government can help mitigate the negative effects of globalization while encouraging the positive changes.”

To be sure, implementing reforms come with their own inherent challenges. “Much of this comes down to determining what policies will be effective and whether such policies are politically feasible. More politically favorable initiatives may be more watered-down,” says Oblander. He adds: “I consider declining suicide rates [in many other countries] to be somewhat of a baseline, considering advances in medicine and psychiatry, which is why constant or increasing rates in spite of such advances stand out.”

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