The 8th CJK Cooperation Dialogue
CJK Cooperation in the Post Pandemic Era, Jan. 17, 2022

Policies and Institutions for Copingwith Population Aging and Low
Fertility in China, Japan and ROK
Jung-Sik Kim(Yonsei University, Seoul, Korea)

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I. Population Aging in CJK• UN Classification- Aging society : Over 65 years old : 7-14%- Aged society : 14-20%- Ultra-aged society : over 20%• Aged population rate (Population Ages 65 andabove) in 2020
- Japan : 28.8% Ultra-aged Society- Korea : 16.5% Aged Society- China : 13.5% Aging society2

Population Aging in CJK• Productive Population rate (Ratio of Ages 15-64)- Japan : 59.5%- Korea : 72.1%- China : 68.6%• Total Fertility Rate (2020)- Japan : 1.34
- Korea : 0.84
- China : 1.70
• High Speed of Aging, Aged and Ultra Aged Societies- Japan : 24 years (Aging- Aged), 11 years (Aged-UltraAged)- China : 15 years(Aging- Aged), 10 years (Aged-Ultra Aged)- Korea : 17 years(Aging- Aged), 9 years (Aged-Ultra Aged)3

Total Fertility Rate in CKJ(1960-2019)

Source : The World Bank, database4

Population Ages 65 and above
in CKJ (1960-2020)

Source : The World Bank, database5Speed of Aging SocietyCountryYear
Aging
Society 7%

No. ofYears

Aged
Ultra-Aged
Society14% Society20%

No. ofYears

7%-14%14%-20%

Japan

1970

1994

2005

24

11

Korea

2000

2017

2026

17

9

China

2001

2026

2036

15

10

U.S.

1942

2014

2032

72

18

U.K.

1929

1975

2028

46

53

France

1864

1979

2018

115

39

Source : UN and world bank data
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Total Fertility Rate
Year

Japan

Korea

1980

1.75

2.9

3.0

1985

1.76

2.2

2.5

1990

1.54

1.6

2.73

1995

1.42

1.7

1.90

2000

1.36

1.48

1.51

2005

1.26

1.09

1.55

2010

1.39

1.23

1.58

2015

1.45

1.24

1.60

2016

1.44

1.17

1.61

2017

1.43

1.05

1.61

2018

1.42

0.98

1.69

2019

1.36

0.92

1.70

2020

1.36

0.84

1.70

Source : Korean Statistical Information ServiceChina

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II. Economic Impacts ofPopulation Aging in CJK
1. Economic Growth
2. Fiscal Deficit and Government Debt
3. Welfare Cost

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1. Economic Growth Rate
• 0.1% increase of the aged population
could decrease 0.3% of economic growthrate in Korea (Recent research results)• The OECD predicted that Korea'spotential real GDP growth rate would be
0.8% in 2030, 1.1% in Japan and 2.1% inChina.
9Aged Populations andEconomic Growth Rate
Low
Fertility
Rate

Aged SocietyDecrease
Production
Low
productive
population

Housing pricebubble Collapse

Decrease
Consumption

Low
Economic
Growthrate

Increase
BudgetDeficits

10Population Ages 15-64 (% of totalpopulation) (1960-2020)

Source : The World Bank, database11

Potential Real GDP Growth Ratein Korea

122. Fiscal Deficits andGovernment Debt
• Aged society will increase the welfare
expenditure and reduce the taxrevenue and finally increase budget
deficits and government debt

• Aged society will increase tax burden
for the productive population group13

Fiscal Deficits and Government
Debt in CJK• Fiscal Deficits/GDP (IMF)
Japan : -13.9%
China : -4.2%
Korea : -6.1%

Government Debt/GDP
Japan : 223%
China : 67%
Korea : 43%14

(Government Debt/GDP) inKorea

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3. Aged Dependency Ratio• Aged-Child Ratio (Ages 65 and over/Ages 0-14)- Japan : 225.2- Korea : 129.3- China : 67.9
• Aged Dependency Ratio(Ages 65 and over/Ages15-64)- Japan : 46.3
- Korea : 20.5
- China : 15.9
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Aged-Child Rate

Source : Korean Statistical Information Service17

III. Causes of Low Fertility Ratein Korea• Decrease in the woman population aged 3039
• Decrease in the marriage rate of women• Increase in the age of marriage for women :increase in the women’s college enrolment(76.7% in 2020)• High housing price18

Population(Women) by Ages inKorea

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Marriage Rate of Women inKorea

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Fertility Rate by Ages in Korea

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Trend of Housing Price in Seoul

Source : Bank of Korea, Economic Statistics System22

IV. Policies for Coping withPopulation Aging and Low Fertility• China allows couples to have 3 children, up from 2 in2021 to response to aging population- Japan has increased the fertility rate from 1.26 in 2005
to 1.37, however it decreased to 1.34 in 2020

- Japan pays 100,000 yen($950) for under ages of 18 toincrease fertility rate in 2021-2022- Japan is considering applying health insurance forinfertility treatment.

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Fertility Rate in Japan

Source : World Bank

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Policies for Coping with Low
Fertility in Korea- Korea provides newborn care services for two months afterchildbirth.

- Korea pays 2 million won ($1,800) at the time of childbirthand- In Korea, a hospital voucher of 600,000 won($500) is provided
at the time of childbirth- Monthly childcare allowance of 300,000 won($250) is paid for
two years after childbirth.
- In addition, a monthly child allowance of 100,000 won($80) is
provided to children under the age of 8.
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Policies for Coping with
Population Aging in Korea• In Korea, an old-age pension of
300,000 won($250) per month is paid
to seniors aged 65 and over in thebottom 70% of income brackets.

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Cooperation for Coping withPopulation Aging and Low Fertility• Exchange the information on theimpact of population aging and lowfertility• Exchange the information about thepolicies for coping with population
aging and low fertility
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kimjs@yonsei.ac.kr28