Aging Population
Concern with population aging has been greatest in the more developed countries, where a high proportion of the population is already aged. Coupled with the trends towards aging in the less developed countries, the situation of the elderly population warrants greater attention than it has received in the past. The rise in both absolute and relative numbers of the elderly has important implications; hence the relationship between economic development and the older population deserves special interest. ... By 2025, the Asian Tigers, namely Singapore, Taiwan, Hong Kong, China, will experience a rapidly dependent population, whereby the share of the aged (> 60 years old) will at least double, and its share of the young (<14 years old) will decline drastically. ... , 1991; pg 66) With this demographic change of an aging population, how then would it affect the labour market of Singapore, an Asian Tiger? As the population ages, first and foremost, the elderly population will retire, and hence the size of the labour market will definitely shrink as the share of the aged increases. ... The aging population not only decreases the size of the labour market, it could also indirectly lead to “an alteration of the occupational structure of the labour force in future. ... In a nut-shell, the aging population hence poses a challenge to the labour market due to the shrinking of the size of the labour force, and as well as the possible alteration of the structure of the labour force. Economic-demographic literature often discusses several population-sensitive savings conditions. ... As such, the older population are viewed as ‘dissavers’, because they are only consuming, and not saving; hence with an increase in the share of the aged in the population, it is postulated that the private savings of the country will fall, and the ratio of ‘savers’ (economically independent) against the ‘dissavers’ (dependent aged and young) will drop as well. ... Given that private savings will fall with an aging population, it can be seen that public savings will also similarly fall. ... (Heller, 1997) It can then be summarized that with an increase in the share of the aged in the population, the savings level of the economy will fall, both private and public savings. It is noted that with an aging population, it would inevitably lead to a slower labour force growth, which then indirectly results in a reduction in investment requirements, which also hinders the growth of the country.