Chart of the Week: The Cost of Asia’s Aging
IMF Blog, May 1, 2017
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Bibliographic details
- Authors: The Editors
- Published: May 1, 2017
Demographic trends
- The demographic dividend in Asia—driven by a young, growing work force (aged 15-64)—is coming to an end as fertility rates decline and life expectancy increases.
- Many countries, particularly in East Asia, will be the fastest-aging societies in the world in the next few decades.
- The region’s population growth, which is already negative in Japan, is slowing and projected to fall to zero by 2050.
- More than a third of the population in Singapore and South Korea are at least 50 years old; in Japan that share is close to half the population.
- Asia’s workforce is expected to shrink by hundreds of millions of people.
Economic impact and projections
- Aging could potentially drag down Japan’s average annual GDP growth by 1 percentage point over the next three decades.
- India and the Philippines, with some of the youngest populations in the region, could potentially see GDP increase by 1 percentage point from a growing workforce.
- China could potentially see a decline of 170 million people in its working-age population over the next three decades.
- Over time, a shrinking workforce and aging population can mean a rise in healthcare costs and pension expenditure, putting pressure on government budgets and translating into lower growth unless offset by supportive policies for productivity and high-quality jobs.
Policy implications and recommendations
- Labor market reforms are key for aging societies to mitigate adverse growth impacts.
- Encouraging foreign workers, including through guest worker programs and migration, can partially offset declines in the domestic labor force.
- Raising labor force participation of women—by expanding child-care facilities (for example, in Japan) and promoting flexible employment—can reduce labor shortages and mitigate adverse growth effects of aging.
- Policies that support productivity and high-quality job creation are important to counteract fiscal pressures from rising healthcare and pension costs.
Additional notes
- The blog post points readers to Chapter 2 in the upcoming Regional Economic Outlook for Asia and Pacific countries, to be released on May 9, for an in-depth analysis of Asia’s demographic landscape and economic prospects.
- Publication date: May 1, 2017.
Source: IMF Blog — "Chart of the Week: The Cost of Asia’s Aging", The Editors, May 1, 2017.
Content in this bundle
- 本周图表：亚洲老龄化的代价; 2017年5月1日; IMF博客
- 今週のグラフ: アジアの高齢化コスト; IMF ブログ 2017年5月1日掲載
- Grafik Pekan ini: Dampak Penuaan di Asia, 1 Mei 2017
