Photo/IllutrationThe Asahi Shimbun

The nation's workforce in 2040 is projected to plummet by 18.8 percent from 2017 unless the economy picks up and more women and elderly people join the working population, according to the labor ministry.

It is the first time for the Ministry of Health, Labor and Welfare to announce estimates of the workforce in 2040.

The ministry's study group of experts on employment policies said the number of people working in 2040 will decline to 54.60 million, compared with 67.20 million in 2017.

The study, issued Jan. 15, said that if the economy picks up, the pace of decrease will slow.

Still, the premise for the estimate is optimistic and it is far from clear whether the slower pace can be achieved.

The study group said a drastic decrease in the workforce could become a factor that obstructs economic growth.

The group compiled the estimates on the basis of the latest data on Japan’s future population that is reviewed every five years by the National Institute of Population and Social Security Research.

That data, announced in April 2017, found that Japan’s total population will decline by 12.7 percent in 40 years from 2015.

Labor force statistics reflect the number of people aged 15 or older who are working or looking for jobs.

An estimate compiled in 2015 showed that the workforce will increase to 65.89 million in 2020 if the economy grows steadily and ratios of female and elderly workers grow.

The number of people working in 2017 stood at 67.20 million, already exceeding the estimate.

The ministry noted that the number of working women and elderly people was increasing faster than predicted.

Given that the number of elderly people is expected to peak in 2042 amid overall population decline, it could be problematic to secure a sufficient workforce by 2040, the study said.

The workforce estimate for 2040 was projected to drop by 12.60 million to 54.60 million if the nation's economic growth rate is zero and ratios of female and elderly workers remain unchanged.

But the workforce will stand at 61.95 million if the economy grows and the ratios become higher.

The premise for the estimate is that economic growth strategies promoted by the Abe administration will pay off and a high economic growth rate of 2 percent in real terms will continue.

During the past 10 years, economic growth in excess of 2 percent in real terms was achieved only in fiscal 2010 and fiscal 2013.