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 8: Population aging, economic growth, and intergenerational transfers in Japan: how dire are the prospects?

Naohiro Ogawa, Sang-Hyop Lee, Rikiya Matsukura, An-Chi Tung and Mun Sim Lai


Global population growth has been steadily slowing down since the second half of the 1960s primarily due to an almost universal reduction in fertility. From 1965 to 1970, the number of countries with fertility rates below replacement (a total fertility rate (TFR) of less than 2.1 children per woman) was eight, but that number swelled to 76 from 2005 to 2010. Although more than half of these low-fertility economies were developed, the number of developing economies with below-replacement fertility increased at a phenomenal rate from 0 to 31 in the four decades under consideration. Currently, approximately 50 percent of the world’s population lives in an economy with below-replacement fertility. Because Asia is the most populous region in the world, with 60 percent of the world’s inhabitants, the majority (57 percent) of the population living below replacement fertility now resides there (United Nations, 2009). It is worth remarking that only 3 percent of Asia’s population resided in countries with below-replacement fertility between 1965 and 1970, but the share grew to 25 percent from 1990 to 1995, when the People’s Republic of China’s (PRC) fertility rate fell below replacement level. It is projected that half of Asia’s population will be residing in societies with below-replacement fertility by 2012 and that this proportion will reach 80 percent in the late 2020s, when India is projected to attain below-replacement fertility (United Nations, 2009). It should also be noted that the number of Asian economies below the replacement level has increased remarkably over time. From 1965 to 1970, there was only one such country (Japan), but from 2005 to 2010, the number increased to 17 and included the PRC, Hong Kong, China, the Democratic People’s Republic of Korea, Japan, Macao, Mongolia, the Republic of Korea, Sri Lanka, Singapore, and Thailand. At present, five Asian economies – Hong Kong, China, Republic of Korea, Macao, Singapore, and Taipei,China – are classified in the category of lowest-low fertility, that is, with a TFR below 1.3. In fact, East Asia’s fertility is now the lowest in the entire world (Jones et al., 2009; Retherford and Ogawa, 2009).

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