Mini Symposium on Demographic Change and Human Capital in Asia
Asian Development Review
Older households in aging populations around the world, especially in the Asian countries, are facing rising challenges in maintaining their overall financial independence and well-being. The challenges are rising because of interrelated demographic developments. The basic one is the "demographic transition" consisting of rising life expectancy and declining fertility, which together contribute to a faster rise in population aging. Moreover, this challenge is particularly acute in connection to
... the rising percentage of older-age groups in the population. Japan stands out relative to the world with 28% of the population aged 65 and over. The pace of median age growth is particularly high in East Asia, where it has been rising faster than in any other region of the world, except Africa. Even more significant is that this pace is forecasted to remain the highest in the world through 2040. Is the aging of the population a blessing or a challenge? The blessing is obvious: living longer may be the most natural and oldest human aspiration and is one of the most popular blessings in any language. Higher longevity also tends to be the result of technological breakthroughs that bolster health conditions at all chronological ages. At the same time, this process creates challenges concerning the impact of the fast pace of population aging on labor market outcomes, income distribution, financial preparedness of older-age workers and retirees, the solvency of defined-benefits public pension systems and public health insurance programs, and their unintended consequences. Most of the papers in this issue attempt to explore the broad question in the preceding paragraph by focusing on one or more of the channels of old-age support that affect individuals' ability to maintain their wealth and wellness as they age, in the aging populations of Asia and the Pacific economies. These channels are equivalent to four general types of "old-age insurance." The first is self-or family-insurance. This channel refers to the ability of old parents to rely on financial support and care from their extended family-mainly from their adult children. A second "insurance"