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Wednesday, Sep 17, 2014

Asia

S. Korea is fastest-aging society

The Korea Herald/ANN | Wednesday, Sep 17, 2014

A recent study by the National Assembly Research Service forecast South Koreans will be extinct by 2750 if the nation's fertility rate, which declined to a new low of 1.19 children per woman last year, continues to remain at the same level.

A simulation in the study suggested that the country's current population of 50 million would shrink to 40 million in 2056 and 10 million in 2136 before the last South Korean died in 2750, making it the first national group in the world to become extinct.

Though a worst-case scenario based on the premise that all other conditions would remain unchanged, the results of the simulation were alarming enough to heighten public awareness of the severe demographic challenges facing the nation.

In realistic terms, however, a more immediate and serious problem may be the rapid aging of the population. Koreans aged 65 or older accounted for 12.6 per cent of the total population last year, the fifth-lowest proportion among the 34 member states of the Organisation for Economic Cooperation and Development.

But over the last four decades, Korea's elderly population has grown at the fastest pace - by four times, more than double the OECD average of 1.6 times, according to a study released last week by the Korea Institute for Industrial Economics and Trade. The proportion of elderly people in the country is forecast to exceed 20 per cent by 2026.

The rapidly aging population, coupled with the lowest birthrate among major advanced nations, is posing a slew of socioeconomic problems for Korea. Experts have warned that the country will struggle with a labour shortage, fiscal strains caused by rising welfare costs, chronic economic sluggishness and excessively conservative trends dominating society.

Debate has been galvanised in recent years on how to cope with changes in the demographic structure. But government policymakers and society as a whole still seem to lack a sense of urgency in addressing demographic challenges.

It is crucial to make effective and persistent efforts to boost the fertility rate, which has remained well below the level required to sustain the current population.

But government policies, including expanding support for child care, have not led to a meaningful rise in the number of newborns in recent years as young Koreans are delaying marriage and childbirth due to deepening economic uncertainties as well as a growing sense of individualism.

More immediate and practical measures need to be taken to prepare for a possible shrinkage of the workforce. The proportion of economically active members of society aged 15-64 stood at 73.1 per cent in Korea last year, surpassing the OECD average of 66.6 per cent. But the ratio is projected to begin declining sharply from 2017.

The measures needed to offset the decrease in the number of working-age people have been relatively well conceived and documented. Necessary measures should now be implemented in a more concrete, comprehensive and urgent manner.

More educated women should be encouraged to join the workforce. The retirement age, which is set to be raised to 60 in 2016 under a revised law, ought to be further extended.

The average life expectancy of Koreans - 80 for men and 85 for women - has reached that of other advanced nations, most of which set the legal retirement age at 65 or older. Serious consideration should also be given to changing immigration policies to accept more immigrants, especially those with professional skills.

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