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Asia’s silver revolution

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In Brief

Never before has population ageing occurred on anything like the scale now being experienced.

Japan is at the forefront of this revolution and many other Asian countries are set to follow.

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In the space of a single lifetime populations have been transformed and family structures turned upside down. No longer do grandparents count grandchildren on fingers and toes; today, four grandparents may beget but a single grandchild.

How did this ‘silver revolution’ occur? Of the multiple demographic drivers of population ageing, fertility decline is most potent. With smaller numbers of children in the population, the proportion of the population who are elderly will increase, and will increase even more if the elderly also live longer. Japan holds the record in population ageing because post-war fertility declined dramatically and longevity has increased rapidly. It is the timing and rapidity of demographic change that places Japan’s population ageing ahead of other developed countries which underwent a more gradual demographic transition.

Significant economic and social transitions underlie and accompany the demographic drivers of ageing. Countries that have undergone substantial post-war economic development are cases in point — in 2012, the percentage of people 60 and older in Japan stood at 32 per cent; in Hong Kong at 19 per cent; in South Korea at 17 per cent; and in Singapore at 15 per cent. Effective population policies, such as China’s one-child policy and Vietnam’s intermittent two-child policy, have accelerated ageing in countries not yet sufficiently industrialised for spontaneous fertility decline to occur. By 2050, according to UN projections, Japan’s 60-plus proportion will exceed 40 per cent, and many other countries in Asia will exceed 30 per cent. What is more, high proportions at older ages will remain the norm.

The much-heralded economic problems of population ageing are becoming increasingly evident to governments and individuals alike. High old-age dependency ratios place a substantial burden on the working-age population, whether through taxation or familial support. At the same time, pressures to save for one’s own retirement and eventual care are rising, fuelled by expectations of both a longer life and a lack of family support. The silver revolution involves all generations.

To provide for increasing numbers of senior citizens, governments seek to raise additional revenue by encouraging greater labour force participation and increasing the retirement age. The latter has the added benefit of reducing aged pension costs. Singapore is increasing the statutory retirement age from 62 years to 65 and later to 67. Korea is considering an increase from 57 to 60, and China an increase from 60 for males and 50/55 for females to 65 for all. Such measures, however, are not efficacious where participation is already high or mostly in the informal sector, or where state provision of aged pensions has yet to emerge. In India, for example, the formal sector is relatively small and few elderly males (and even fewer females) have pension rights, maintaining high participation rates in the informal sector well into old age. In Japan, where employees already work well beyond the statutory retirement age of 60, negating the value of any increase, a gradual doubling of the 5 per cent sales tax has recently been introduced to cover the costs of ageing.

While Japan’s wealth provides the means to weather the problems of population ageing, many other countries in Asia are not so well placed. Growing old before getting rich is not an enviable situation.

China, for example, faces a considerable burden. Her remarkable achievements in curbing population growth — which not only benefited her own economic development but the ultimate sustainability of the planet — have resulted in rapid population ageing. The proportion aged 60-plus is set to increase from 13 per cent in 2012 to 24 per cent in 2033, when the population will reach its peak, to 34 per cent in 2050. Despite high rates of economic growth, population ageing presents China with a formidable challenge, not only because of the sheer size of the older population but also because of ongoing developmental changes in Chinese society. The ability of working-age people to provide informal care for elderly parents has been eroded by several factors, including fewer multigenerational households, increasing labour migration and the pressures of highly-formalised work routines and professional competitiveness. This situation is compounded by the 4-2-1 problem, whereby the only child becomes responsible for two ageing parents and four grandparents (the prospect of an 8-4-2-1 problem is already on the horizon), leading to hardship for increasing numbers of the elderly and those who support them. Though China’s 12th Five-Year Plan includes the establishment of a basic aged care system, its adequacy is in question in terms not only of coverage but level of care. The main burden of support and care will continue to fall on the family.

The problems of population ageing aging are shared to varying degrees by most, if not all, developing countries in Asia. While government provision is inadequate, the private and non-government market for goods and services has yet to emerge beyond a token presence. Private aged care fees are prohibitive, even among the middle classes, retarding development of the market. Moreover, shortages of trained staff keep the supply of aged care low — and the price high. With many private facilities resembling five-star hotels, there is clearly room for more affordable facilities to be developed under not-for-profit business models or government subsidisation.

High old-age dependency ratios and changing socio-economic circumstances threaten the viability of the centuries-old ‘intergenerational contract’ whereby successive generations care for their elders. As a generation, the elderly are losing status as education and materialism gain sway. The ways of the past are rapidly devalued in the scramble for wealth, even though personal respect may endure. The pressures of the modern economy and the new demographic reality lead at times to desperate responses, including elder abuse, the abandonment of elders by migrant family members, or suicide by older people who perceive themselves to be a burden.

The silver revolution is unprecedented, and once completed will not occur again. It brings a new balance between the generations and, nuanced by cultural influences, involves profound and wide-reaching social change. Only careful management of its consequences will deliver a healthy and wealthy post-revolution society. Today’s younger generations might take a moment to consider what kind of society they are looking forward to in old age.

Heather Booth is Associate Professor at the Australian Demographic and Social Research Institute, Australian National University

This article appeared in the most recent edition of the East Asia Forum Quarterly,‘Demographic Transition’.

 

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