The aging of Korea Demographics and retirement policy in the Land of the Morning Calm

Abstract

Korea is still a demographically youthful nation. In 2005 the elderly made up just 9 percent of the population far beneath the developed-country average of 15 percent. But with life expectancy rising and birthrates plumbing record lows Korea is about to undergo a stunning demographic transformation. According to the latest government projections 38 percent of Koreas population will be elderly by 2050 putting it in contention with Japan Italy and Spain for the oldest country on earth. The aging of its population will bring profound changes to nearly every dimension of Korean life. Government budgets will come under relentless pressure from rising expenditures on pensions and health care. Businesses will have to cope with a deficit of entry-level workers and young consumers while families will have to cope with a surplus of frail elders. Unless Korea takes adequate and timely steps to prepare it could face a future of slower economic growth and stagnating living standards. (excerpt)