Population aging and the three demographic dividends in Asia

• Main Authors: Ogawa, Naohiro, Mansor, Norma, Lee, Sang-Hyop, Abrigo, Michael R. M., Aris, Tahir
• Format: Article
• Published: World Scientific Publ 2021
• Subjects: HC Economic History and Conditions
• Online Access: http://eprints.um.edu.my/35904/; https://www.scopus.com/inward/record.uri?eid=2-s2.0-85104473470&doi=10.1162%2fadev_a_00157&partnerID=40&md5=5bf1b76a37227f4307f4e4b2bc7a29c3

The present study first examines the trends in age structural shifts in selected Asian economies over the period 1950–2050 and analyzes their impact on economic growth in terms of the first and second demographic dividends computed from the system of National Transfer Accounts. Then, using the National Transfer Accounts, we analyze the effect of the age structural shifts on the pattern of intergenerational transfers in Japan; the Republic of Korea; and Taipei,China. A brief comparison of the results reveals that, in the next few decades, the latter two are likely to follow in Japan’s footsteps by increasing public transfers and asset reallocations, and by reducing familial transfers, particularly among older persons. Next, we consider a newly defined demographic dividend, which is generated through the use of the untapped work capacity of healthy older persons and to which we refer as “the silver” or “the third” demographic dividend. By drawing upon microlevel datasets obtained from Japan and Malaysia, we calculate the magnitude of the impact of that dividend on macroeconomic growth in each of the two economies, concluding that while in Japan the expected effect is substantial, in Malaysia it will take several decades before the country can enjoy comparable benefits. © 2021 Asian Development Bank and Asian Development Bank Institute.