Bracing for the ‘ultra-aged’ era

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Bracing for the ‘ultra-aged’ era

Japan is already an “ultra-aged” society with the number of elderly aged 65 or older taking up 27 percent of its population. Schools are closing down one by one and are being increasingly replaced by nursing homes. The waiting list to get into a good nursing home is said to be 20 times longer than the one for children competing for a good daycare center.
Korea is set to join the list of super-aged societies. The total fertility rate — or the average births a woman is expected to deliver in a lifetime — was 1.05 last year, the lowest in the world. The number of new-born babies — which exceeded 1 million in 1970 — totaled 357,700 last year. In contrast, the number of seniors aged 65 and over increased to account for 13 percent of the population. Of them, 45 percent were impoverished, the biggest share among the members of the Organization for Economic Cooperation and Development (OECD).
When Korean baby-boomers join the senior set in 2030, nearly one third of Koreans will be an elderly, similar to Japan today. Daycare centers are declining while nursing homes for the elderly are on the increase. According to Statistics Korea, the number of daycare centers for children has been falling since 2013. On the other hand, nursing facilities for the elderly increased to 5,187 in 2016 from 3,385 in 2012.
Korea’s staggering economic prosperity owed much to the baby-boomer generation, which worked the longest hours in the world and managed to save even as they sacrificed themselves to provide a decent education for their children. The economically active population aged from 15 to 65 has surged by 20 million since 1970. That number will decline 4 million by 2030. When a working population decreases, finding jobs will become easier than now. But the economy will lose vitality and the Korean market will become smaller due to reduced production and falling consumption. As a result, technology advances will slow. The burden on the younger population to take care of retirees will become heavier.
Demographics are the biggest imminent danger to Korean society. The government comes up with new spending plans and measures to combat the problem every five years, but in vain.
The government must study why its past policies have failed to draw up more workable plans. They must continue efforts to find measures to promote births, assist in child care and raise living conditions for the elderly.
It must provide aid programs for single parents, adopted families and immigrants. It also should consider more radical solutions such as granting dual citizenship to foreign nationals who reside in Korea for a long time and attract foreign caregivers and nurses. Korea should benchmark successful policies of advanced economies.
Japan has long been fighting demographic woes. It assisted child birth and daycare financially and changed the labor and corporate culture to allow workers to better balance work and family. It assigned a minister specifically to keeping the population above the 100 million mark. A birth rate that was 1.26 in 2005 soared to 1.44 last year.
The government increased nursing homes and opened up to caregivers from Southeast Asia. Prime Minister Shinzo Abe in February vowed to create an “ageless” society where more senior citizens can work without discrimination due to their age.
Raising the birth rate in Korean society won’t be easy. The young are deferring marriage and having kids because of economic hardships and insecurity about their future. Couples will want to start a family only when they are secure. On top of short-term support, the government must continue to make decent jobs for the young and give them assurances that the economy will prosper.
The corporate environment also must improve to make it easier for women to give birth and care for their families without worrying about their jobs. Gender equality must be established at home and at the broader social level. When economic and living conditions improve, more people will have children. The administrative city of Sejong showed the highest birth rate (1.67) in the nation because it provides good daycare infrastructure for young government employees.
Japan can offer guidance. We must prepare for the aged society both on the individual and national level. The government must encourage each citizen to plan well so as not to be poor in old age and also increase assistance to the elderly. The elderly now live longer and wish to work. The state must help the elderly stay healthy and contribute to society. The retirement age should be extended to 70 or older. With the help of new technologies, elderly should be able to find new job opportunities.
We can’t wait until it’s too late to respond to an aged society. Even if the birth rate goes up, society will only see larger numbers of young workers 20 years later. Korea requires more dramatic and creative actions to turn its society into one where people wish to have children.
Translation by the Korea JoongAng Daily staff.

JoongAng Ilbo, Mar. 15, Page 31

*The author, a former chief economist at the Asian Development Bank, is a professor of economics at Korea University.

Lee Jong-wha
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