An Alternative Index of Population Aging: Accounting for Education and Elderly Health in the Case of Korea

IntroductionI propose an alternative aging index that accounts for changes in educational attainment and elderly health using Korean data. Population aging is a worldwide phenomenon, and most studies focus on describing the socioeconomic burdens associated with it and developing policy measures to lessen its consequences. According to Goldstein (2009), the median age of the world population was 26.7 in 2000 and is expected to increase to 38.1 in 2050. Such rapid population aging would entail a disproportionate increase of the elderly compared with working-age people, and concerns about the consequences of such an increase have been rising in most industrialized societies. These countries have directed their energy toward slowing down population aging and/or devising policies to cope with it (Kalwij 2010; McDonald 2002). The Old-Age Dependency Ratio (OADR), namely, the ratio of population aged 65+ to population aged between 15 and 64, has been widely used to illustrate the burdens of population aging. This makes sense because age is arguably the most important characteristic that determines the productivity of individuals, and age structure in a given society should be informative to show societal burdens associated with population aging. In addition, because the low fertility in Korea during the past decades should have a long-lasting impact on age structure due to population momentum (Whang and Choi 2015), concerns about changing age structure are highly relevant. The sole focus on the age structure of the population, however, omits an important aspect of population aging, namely, socioeconomic development that potentially mitigates the negative consequences of population aging. Recently, research in population aging has developed indices for population aging by accounting for other characteristics such as education and health in addition to chronological age, which is called "the characteristics approach" (Sanderson and Scherbov 2013). The current study aims at contributing to this approach by proposing an alternative index of population aging that accounts for education and elderly health.Population aging proceeds along with other socioeconomic changes, such as improvements in educational attainment and elderly health, all of which have important implications for the consequences of population aging (Lee and Mason 2010). First, improvement in education should increase the capacity of the population to support the elderly. Compared with societies with low levels of individual educational attainment, societies composed of highly educated individuals are likely to have a better capacity to support their elderly. Societies of the latter type would be economically better off and able to allocate more resources to elderly support. Given that population aging proceeds in tandem with educational expansion, using the OADR as a sole measure of population aging to assess its consequences may exaggerate the socioeconomic burdens. Second, population aging also progresses with improvement in elderly health. Studies have shown that increasing life expectancy is also associated with increasing healthy life expectancy. In other words, people live in better health conditions as well as live longer.1 Such an improvement in health would reduce the socioeconomic burdens associated with population aging because the healthy elderly would be more independent compared to the sick elderly. Once again, a conventional OADR does not incorporate this change and is likely to exaggerate the burdens of population aging. The current study attempts to develop an alternative index of population aging that accounts for improvements in educational attainment and elderly health using data pertaining to Korea, which is experiencing extremely rapid population aging. In doing so, this study will contribute to the literature on population aging and help develop appropriate policy measures to cope with it. This paper is organized in the following order. …