The Population Shock: Aging Society
by Thomas Kwon
October 16, 2014
Speakers:
Baochang Gu, Professor of Demography, Renmin University of China Center for Population and Development Studies
Koichi Hamada, Tuntex Professor Emeritus of Economics, Yale University
HanGon Kim, Professor of Sociology, Yeungnam University
East Asia may have an image of youthful exuberance and fast-paced living, but the demographics within paint a different picture. Baochang Gu, professor of demography at the Renmin University of China Center for Population and Development Studies, framed the issue as central to this year’s theme of invigorating the global economy: “We have to ask, ‘who are the people invigorating the economy?’”
Dr. Gu was one of three speakers at the 2014 World Knowledge Forum panel on the ramifications of aging populations in China, South Korea, and Japan. Accompanying him were HanGon Kim, professor of sociology at Yeungnam University, and Koichi Hamada, Tuntex Professor Emeritus of Economics at Yale University.
The first two panelists relayed what they felt were the most impactful statistics. According to Dr. Gu, China is not only the most populous country in the world, but also its oldest. In fact, China’s elderly population alone would amount to the eleventh largest country in the whole world.
“This is a demographic situation we’ve never seen before in the long history of Chinese society,” Dr. Gu said.
Dr. Kim compared South Korea with other OECD nations. South Korea ranked dead last in the OECD in multiple areas, including fertility rate, expected newborn babies, and poverty percentage of the elderly. In his eyes, this makes for a potentially toxic mixture. At current rates, Dr. Kim explained, “The National Pension Fund will be drained by 2060.”
Dr. Kim continued, focusing on the near future.
“In the shorter term, there are three scenarios that are solutions…an increase in women’s workforce participation, an increase in elderly labor participation, plus open doors to the foreign workers,” he said.
Dr. Hamada added some insight on Dr. Kim’s first point.
“In China, Korea, and Japan, women’s participation rate needs to grow…advanced countries have 80 percent or 75 percent,” he said. He contended that if Japanese women worked like their Western counterparts, it would be akin to having 10 percent population growth, a huge jump.
To illustrate his view, Dr. Hamada drew on a time he was invited to a Japanese corporate meeting to give a speech.
“Of 60 people or so, no women were there. Instead, there was a shadow meeting of housewives of the executives…in the next room,” he said. If deployed, he explained, those highly educated women would be an invaluable part of the workforce.
In the long-term, the panelists agreed on increased fertility as a potential lifeline. However, reversing declining rates has never been accomplished in advanced nations to date. Nevertheless, Dr. Kim was hopeful.
“The more important thing is to make a first move,” he said.
Dr. Gu also pushed for action, saying that there is an immediate need to combat the growing global problem of getting old before getting rich, suggesting that what we need is to be ready before it’s too late.