Population Aging in East Asia and its Policy Implications

Abstract

Population aging is known to have significant social, political, and economic effects. One of the main concerns of population aging is that lower labor force participation and productivity of older workers lead to slower economic growth. Park and Shin (2012), examining the impact of population aging on 12 developing Asian economies, find that advanced population aging will have a sizable adverse impact on economic growth. In addition to slower economic growth, the industrial structure is likely to change as the overall demand will be altered by demographic shifts. Due to higher demands for healthcare and medical services, the share of these sectors will expand while others may fall in proportion.