Bruce Stokes: Demographic clocks ticking all across Asia
East Asia's demographic clock is ticking, and it's loudest in Japan. But by the middle of the century South Korea may face an equal aging challenge, with China not far behind. Meanwhile, few East Asians are confident of an adequate standard of living in their old age. And fewer than half look to their government to be able to ensure their economic well-being in their twilight years despite dramatic expected increases in public spending on the elderly.
The good news is that East Asians' perceptions of their demographic future are in line with demographic reality. The bad news is they have a fairly bleak perspective on what their life is likely to be like in their twilight years.
In 2010, the median age in Japan was already 45, the oldest among all major nations. That means there were as many Japanese over the age of 45 as there were under. By 2050, the U.N. estimates the median age in Japan will rise to 53. By then South Korea will be just as old and the median age in China is likely to be 46. Only in youthful Indonesia will the median age be a mere 38.
Already the oldest society in Asia, Japan's aging spurt is slowing down, while other nations still face that wrenching social and economic transformation. Over the next four decades Japan's median age will increase by 8 years. South Korea's will grow by 15 years, China's and Indonesia's by 11.
Older people need care. And paying for that care necessarily falls in many cases on those who are still working, either through the taxes they pay or through the support they provide as family members.
Today there are 36 Japanese aged 65 or older for every 100 working age Japanese aged 15 to 64. By 2050, the U.N. estimates, there will be twice that number, the highest old-age dependency ratio among major Asian countries. The increased burden this will place on those still in the workforce is obvious. But increases in old-age dependency may be even worse in other parts of Asia. The elderly burden is likely to triple in Indonesia, more than triple in China and quadruple in South Korea by the middle of the century.
Caring for this graying population will put new strains on government budgets. In 2010, Japan spent 10% of its gross domestic product on public pensions, according to the International Monetary Fund. That is expected to grow marginally to 10.7% by 2050. South Korea, which spent just 1.7% of its GDP on pensions at the beginning of this decade, will pay out an even larger chunk than Japan, at 12.5% by mid-century. And China will increase expenditures from 3.4% to 10%. Only relatively young Indonesia is likely to avoid the fiscal burden of aging, spending only 1.7% of its economy on public pensions by 2050.
Facing such challenges, it is little wonder that most Asians are worried about their future. Nearly nine in 10 (87%) Japanese say aging is a major problem facing their country, according to a new Pew Research Center survey. About eight in 10 (79%) South Koreans agree. Two-thirds of Chinese (67%) are concerned. Only Indonesians (25%) seem unperturbed. And people in aging Asian societies are notably more concerned than are Europeans or Americans. Just 55% of Germans and 26% of Americans say aging is a major national issue.
People are worried because they are not at all certain about what their lives will be like in their last years. Just 3% of Japanese and 7% of South Koreans are "very" confident they can sustain an adequate standard of living in their old age. Only 14% of Indonesians and 20% of Chinese are optimistic. But Asians are not alone. Germans (13%) and Americans (24%) are not much more confident.
Faced with the daunting burden of providing for people as the end of life approaches, Asians are divided over who should bear the greatest burden of such care. More than a third (36%) of Japanese say it's the government's task, a third (33%) say the obligation belongs to the family and roughly a quarter (27%) say it is up to the individual.
More than half (53%) of South Koreans say the individual is responsible for his or her own well-being in old age, a third (33%) say it's the government's job, and only 10% say it should fall to the family of an aging person.
The Chinese, on the other hand, are more likely to see elder care as a government responsibility. A plurality (47%) look to the public sector, 20% say the family, and only 9% say it's the individual's burden.
Japan is already beginning to face the challenge of an aging population. But other major Asian nations are not far behind. Few people in these societies are optimistic about maintaining their standard of living as they age. And few expect the government to be of much help.
Bruce Stokes is director of global economic attitudes at the Pew Research Center.