Aging, Economic Growth, and Old-Age Security in Asia
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Aging, Economic Growth, and Old-Age Security in Asia

Edited by Donghyun Park, Sang-Hyop Lee and Andrew Mason

First, the expert contributors argue, Asia must find ways to sustain rapid economic growth in the face of less favorable demographics, which implies slower growth of the workforce. Second, they contend, Asia must find ways to deliver affordable, adequate, and sustainable old-age economic security for its growing elderly population. Underpinned by rigorous analysis, a wide range of concrete policy options for sustaining economic growth while delivering economic security for the elderly are then presented. These include Asia-wide policy options – relevant to the entire region – such as building up strong national pension systems, while other policy options are more relevant to sub-groups of countries.
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Chapter 3: Impact of population aging on Asia’s future growth

Donghyun Park and Kwanho Shin


Logically, demographic structure – the age structure of a country’s population – should affect that country’s economic performance. A country with a youthful population will be more productive than a country with an older one as it will have a larger labor force relative to population size. More workers produce more goods and services, so younger countries tend to grow faster economically than older countries. A general loss of economic dynamism explains why advanced economies with maturing populations are concerned about population aging and also helps to explain why such economies have become more open to immigration in recent years. The ongoing shift of global economic power from advanced economies to developing economies to some extent reflects the demographic differences between the two. Due to a wide range of economic and social factors, developing Asia has begun to follow in the demographic footsteps of the advanced economies; the demographic transition now underway in the region shares many of the same features. Rising living standards have led to declines in mortality that in turn have resulted in a fall in birth rates and a rise in life expectancy. Better healthcare has been a key factor in both, and improvements in female education and the greater participation of women in the labor force along with reduced reliance on children for old-age support have also contributed to lower birth rates. In short, developing Asia’s population aging follows the general historical pattern of countries growing older as they get richer. Developing Asia’s seemingly inexhaustible supply of workers for export-oriented industrialization catapulted the region from the periphery to the center of the world economy, but the working-age population in the region is aging and is expected to do so at accelerated rates in the coming decades, though this will vary from economy to economy. Some economies still have youthful populations while in others aging is a much more immediate issue. Regardless of these differences, the region as a whole will have to address the economic consequences of the demographic transition to sustain growth in the medium and long term.

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