To facilitate our analysis in the remainder of this chapter, let us examine, primarily drawing upon the 2010 United Nations population projection (United Nations 2011), the long-term demographic developments in Asia, both in the past and for the future.
In 2010, Asia’s total population exceeded 4.2 billion people, which is more than double
CHANGING INTERGENERATIONAL TRANSFERS 127
the size observed in 1965. Th e annual growth rate of the population in Asia, however, has been declining continuously during the past four decades; as opposed to its peak value of 2.48 percent during 1965–1970, the current annual growth rate is estimated at 0.99 percent. With the emergence of slower population growth in the latter half of the twentieth century, Asia’s demographic outlook of today is substantially diff erent from that of only a few decades ago.
Such substantially slower population growth in Asia has been caused chiefl y by a signifi cant decline in fertility over the past few decades. In the 1960s, Japan was the only Asian country with below-replacement fertility (a total fertility rate, or TFR, of less than 2.1 children per woman). By 2005–2010, the number increased to 19 coun- tries/areas, including China, Hong Kong, Taiwan Province of China (Taiwan hereaf- ter), the Republic of Korea, Singapore, and Th ailand. In terms of the population share, as shown in Figure 5.1 , only 5.0 percent of Asia’s population lived in countries with below-replacement fertility in 1965–1970, as compared to 43.4 percent in 1990–1995, when China’s fertility rate fell below the replacement level. Moreover, since 2010 half of Asia’s population has already been residing in societies with below-replacement fertility, and more than 80 percent of the Asian population will live in countries with a fertility rate below the replacement level in the early 2030s, when India is projected to attain the below-replacement level of fertility. In 2005–2010, Hong Kong, Macao, Taiwan, the Republic of Korea and Singapore were classifi ed in the category of lowest-low fertility (i.e., those with a TFR below 1.3). In fact, East Asia’s fertility is now the lowest in the
0 10 20 30 40 50 60 70 80 90 100
1950-1955 1955-1960 1960-1965 1965-1970 1970-1975 1975-1980 1980-1985 1985-1990 1990-1995 1995-2000 2000-2005 2005-2010 2010-2015 2015-2020 2020-2025 2025-2030 2030-2035 2035-2040 2040-2045 2045-2050
(%)
Year
Note: Calculated by the author using data from the World Population Prospects: The 2010 Revision (United Nations 2011).
FIGURE 5.1 Proportion of the population of countries with below-replacement level fertility in Asia
entire world (McDonald 2009; Jones and Gubhaju 2009), and among East Asia, Taiwan had the lowest TFR of 0.895 in 2010 (Ministry of the Interior, ROC (Taiwan), date unknown).
Parallel to the rapid decline in fertility, marked mortality improvements have been achieved in the Asian region. Particularly, the Japanese post-war experience is a case in point. When Japan joined the OECD in 1964, it had the lowest life expectancy at birth among the member countries, but by the early 1980s, it achieved the highest. At present, approximately 30 countries in Asia have life expectancies higher than 70 years. In the case of East Asia, four countries/areas (Hong Kong, Macao, Japan, and the Republic of Korea) have already surpassed the 80-year level.
As a result of these rapid fertility and mortality transformations in the second half of the twentieth century, we have witnessed phenomenal changes in Asia’s demographic landscape in terms of population age distributions, with a relative increase in the num- ber of the elderly and a relative decrease in the number of the young. As illustrated in Figure 5.2 , Asia’s total dependency ratio, which is defi ned as {[(aged 0–14) + (aged 65+)] / (aged 15–64)}, reached its peak value (0.803) in 1966, aft er which its projected long-term trend shows a U-shaped pattern, reaching the trough value (0.467) in 2016. Th is implies that in Asia as a whole, the share of the working age population has been increasing since 1966 to date, but is quickly approaching the end of growth. For Asia, this 50-year span, during which the share of the working age population continuously rises, corre- sponds to the period in which age structural transformations lead to a very direct and
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Total: (0-14)+(65+)/(15-64)
Young: (0-14)/(15-64)
Aged: (65+)/(15-64)
Oldest old: (85+)/(15-64)
Year
Note: Calculated by the author using data from the World Population Prospects: The 2010 Revision (United Nations 2011).
FIGURE 5.2 Changes in dependency ratios for Asia as a whole, 1950–2050
CHANGING INTERGENERATIONAL TRANSFERS 129
favorable impact on per capita income growth called “the fi rst demographic dividend,”
as we shall see in more detail in the ensuing section.
In Asia, the broad outlines of the demographic transition are fairly similar in almost all of the countries in the region, although the speed and timing of the transition vary across countries. Th e age composition of each of the Asian countries has been chang- ing rapidly since the mid-twentieth century (Ogawa 2003). As shown in Table 5.1 , from 1975 to 2000, the total dependency ratio declined substantially in all of the three sub-regions and 10 countries listed. Th e extent to which the total dependency ratio decreased over the above-mentioned period in these countries is closely related to the magnitude of their fertility decline, as refl ected in the inter-temporal change in the young dependency ratio, defi ned as [(aged 0–14) / (aged 15–64)]. Among the 10 countries in Table 5.1 , Th ailand had the largest reduction in total dependency ratio of 0.403, from 0.850 to 0.447, followed by Mongolia (0.372), the Republic of Korea (0.318), Indonesia (0.304), and China (0.290). Th e fact that all of these countries have shown substantial economic progress over the past decade or two may suggest that such steep declines in the total dependency ratio have facilitated the rapid economic growth in these countries.
Th e calculations based on the 2010 United Nations population projections shown in Table 5.1 indicate that the countries with high total dependency ratios will face a considerable reduction of the burden placed upon the working-age population in the fi rst quarter of the twenty-fi rst century and beyond. In these countries, the declin- ing total dependency ratios are likely to facilitate their developmental process. In contrast, the countries with low total dependency ratios are expected to undergo a substantial increase in burden, mainly due to a rapid rise in the proportion of the elderly, as represented by the aged dependency ratio, expressed as [(aged 65+) / (aged 15–64)]. In the countries whose onset of fertility reduction was early, the changes in the aged dependency ratio are most pronounced. Clearly, Japan had the largest gain (+0.136), from 0.116 in 1975 to 0.252 in 2000. Among the countries listed in this table, the Republic of Korea showed the second largest gain (+0.042), followed by Singapore (+0.038).
A careful comparison of the index of aging, however, yields a picture substantially dif- ferent from the one based upon the aged dependency ratios. Because the eff ect of fertil- ity decline is immediately refl ected in the index of aging, a marked increase in this index is observed among several developing countries under review, as presented in Table 5.1 . Obviously, the countries that have shown a large increase in the aged dependency ratio, such as Japan, the Republic of Korea, and Singapore, have also seen a marked rise in their index of aging. Beside these countries, China and Th ailand experienced a consid- erable increase in the index of aging during 1975–2000.
By 2000, Japan’s index of aging had already exceeded the 100-level. Over the period 2000–2025 (to be exact, from 2005 to 2025), Japan is expected to remain the most aged society not only in Asia but in the entire world. By 2050, however, the value of the index of aging for the Republic of Korea is projected to be right behind that for Japan. Th ese two East Asian countries will be closely followed by Singapore.
Table 5.1 Age Structural Changes for Selected Asian Countries in 1975, 2000, 2025, and 2050
1975 2000 2025 2050
Dependency ratio Index of aging
Dependency ratio Index of aging
Dependency ratio Index of aging
Dependency ratio Index of aging
Total Young Aged Total Young Aged Total Young Aged Total Young Aged
Asia 0.779 0.705 0.074 11 0.573 0.482 0.091 19 0.470 0.321 0.149 46 0.549 0.271 0.278 103
East Asia 0.730 0.647 0.083 13 0.476 0.360 0.117 32 0.445 0.223 0.222 100 0.667 0.225 0.442 196
China 0.771 0.690 0.081 12 0.481 0.377 0.104 27 0.422 0.223 0.199 89 0.640 0.221 0.419 190
Japan 0.475 0.359 0.116 32 0.466 0.214 0.252 117 0.721 0.216 0.505 233 0.958 0.262 0.696 266
Mongolia 1.011 0.909 0.102 11 0.639 0.578 0.062 11 0.493 0.404 0.088 22 0.574 0.352 0.222 63
Republic of Korea 0.713 0.654 0.060 9 0.395 0.292 0.102 35 0.512 0.216 0.296 137 0.851 0.244 0.607 249
South-East Asia 0.861 0.794 0.068 9 0.575 0.499 0.075 15 0.458 0.327 0.131 40 0.555 0.274 0.280 102
Indonesia 0.851 0.787 0.064 8 0.547 0.475 0.071 15 0.433 0.311 0.123 39 0.557 0.257 0.300 117
Singapore 0.586 0.521 0.065 13 0.405 0.301 0.103 34 0.509 0.214 0.295 138 0.812 0.236 0.576 245
Thailand 0.850 0.786 0.064 8 0.447 0.347 0.100 29 0.447 0.230 0.217 94 0.651 0.237 0.414 175
South-Central Asia 0.804 0.741 0.063 9 0.667 0.597 0.070 12 0.487 0.384 0.103 27 0.482 0.284 0.199 70
Bangladesh 0.972 0.903 0.069 8 0.704 0.636 0.069 11 0.417 0.332 0.085 26 0.464 0.231 0.233 101
India 0.774 0.714 0.061 9 0.638 0.568 0.069 12 0.486 0.378 0.108 29 0.480 0.281 0.199 71
Pakistan 0.885 0.815 0.070 9 0.828 0.756 0.072 9 0.536 0.454 0.081 18 0.451 0.299 0.152 51
Note: Calculated by the author using data from the World Population Prospects: The 2010 Revision (United Nations 2011).
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