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Improving skills development for aging population namchul lee, global hr forum 2010.pdf, seoul, korea

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Population ageing will result in the decline in the number of the economically active and thereby hinder growth. The governments and societies around the world are concerned as this will mean that …

Population ageing will result in the decline in the number of the economically active and thereby hinder growth. The governments and societies around the world are concerned as this will mean that fewer numbers of productive workers will be left to shoulder the growing burden of supporting the elderly. This may bring about a crisis in both economic and social terms. This session will raise two agendas. First, we will forecast the future of the aging population around the world. Second, we will focus more specifically on creating future jobs and vocational development for the aging population.

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  • 1. October 28, 2010 55thth Global ForumGlobal Forum Namchul Lee, Ph. D. KRIVETNamchul Lee, Ph. D. KRIVET Improving Skills Development for Aging Population
  • 2. Abstrct Population ageing will result in the decline in the number of the economically active and thereby hinder growth. The governments and societies around the world are concerned as this will mean that fewer number of productive workers will be left to shoulder the growing burden of supporting the elderly. This may bring about a crisis in both economic and social terms. This paper will raise two agendas. First, we will analyze the labor market of the aging population in Korea. Second, we will focus more specifically on vocational development(skills) for the aging population. www.krivet.re.kr
  • 3. Contents I. Introduction II. Changes of Labor Market in Aging Population III. Reasons and Effects of Aging Population IV. Policies for Aging Population www.krivet.re.kr
  • 4. I. Introduction □ Aging population is one of the key demographic trends facing the world today. - Aging population particularly pronounced in Korea. □ Increased life expectancy and decling birth rates have been the key demographic trends causing aging population. - The young and the elderly are the two age groups that tend to consume more than they produce. - They rely on working – age adults to support their consumption. www.krivet.re.kr
  • 5. □ Korea is expected to become one of the world’s most aged societies over the next 20 years. - Seniors aged 65 and older will account for 38.2 percent of the nation’s total population by the next 2050(UN). - The ratio is the first largest among G20 nations. □ Government is not yet prepared to embrace the changing demographic as it is not equipped with an advanced system for the elderly.
  • 6. In Chapter 2, we analyzed population of the old-aged people, the composition of the productive population, the aging trend, the participation rate of the elderly population in economic activities, and the unemployment rate and employment structure of the old-aged people to analyze the change in the labor market of the old-aged people. In Chapter 3, the causes and effects of aging are analyzed. In Chapter 4, alternative policies for aging are presented. Chapter 5 is the conclusion of this study. www.krivet.re.kr
  • 7. Purposes This study aims to understand the characteristics of aging in Korea. We divided the elderly into further segmented age levels and sex and analyzed the change of their education levels and position compositions by job type at the mid- to long-term level. Through this process, we expect that we will be able to understand the major subjects of employment policies, hoping this may form the basic data for establishing vocational ability development policies. www.krivet.re.kr
  • 8. II. Changes of Labor Market in Aging Population 1. Proportion of Population and Working Age population by Age Groups Proportion of Population by Age Groups www.krivet.re.kr Classification Total Population Proportion of Population 0~14year 15~64year 65year 1990 42,869 25.6 69.3 5.1 1995 45,092 23.4 70.7 5.9 2000 47,008 21.1 71.7 7.2 2005 48,138 19.2 71.7 9.1 2010 48,874 16.2 72.9 11.0 2016 49,312 8.5 73.4 18.1 2020 49,325 12.4 72.0 15.6 2030 48,634 11.3 64.4 24.3 2040 46,343 10.3 57.2 32.5 2050 42,342 8.8 53.0 38.2 Source: National Statistics Office, Estimate on the Population of the Future (Each Year). (Unit:, thousand, %)
  • 9. www.krivet.re.kr Proportion of population aged 65 over by sex [성별65세이상인구구성비] 2.8 3.8 5.5 8.9 13.4 21.6 4.8 6.4 9.0 13.0 17.8 27.0 0.0 10.0 20.0 30.0 1980 1990 2000 2010 2020 2030 (%) 남자 여자Male Female
  • 10. www.krivet.re.kr Population aged 65 over by sex Note: Ratio of Sex=(Male Population aged 65 over/Female Population aged 65 over) × 100 Source: NSO. Estimate on the population of the future 1980 1990 2000 2010 2020 2030 Total of Male 19,236 21,568 23,667 24,540 24,680 24,190 Population aged 65 over 545 (2.8) 822 (3.8) 1,300 (5.5) 2,190 (8.9) 3,303 (13.4) 5,218 (21.6) Total of Female 18,888 21,301 23,341 24,334 24,646 24,444 Population aged 65 over 911 (4.8) 1,373 (6.4) 2,095 (9.0) 3,167 (13.0) 4,398 (17.8) 6,593 (27.0) Ratio of Sex1) 59.7 59.8 62.0 69.2 75.1 79.1 (Unit : thousand)
  • 11. www.krivet.re.kr 2. Trends of Aging Population Estimated on the Change in Structure of the Working-Age Population by Age Groups (1990-2050) Notes: 1) 15~64 Working age population. 2) 15~64 ( ): proportion of total population. 3) 15~24, 25~49, 50~64 ( ): proportion of 15~64 population. Source: National Statistics Office, Estimate on the Population of the Future (Each Year). (Unit: thousand, %) Classification 15∼64 year 15∼24 year 25∼49 year 50∼64 year 1990 29,701 (69.3) 8,784 (29.6) 16,148 (54.4) 4,768 (16.1) 1995 31,900 (70.7) 8,289 (26.0) 18,104 (56.8) 5,507 (17.3) 2000 33,702 (71.7) 7,697 (22.8) 19,816 (58.8) 6,189 (18.4) 2005 34,530 (71.7) 6,879 (19.9) 20,587 (59.6) 7,064 (20.5) 2010 35,611 (72.9) 6,515 (18.3) 20,196 (56.7) 8,900 (25.0) 2016 36,190 (73.4) 6,424 (17.8) 18,787 (51.9) 10,978 (30.3) 2020 35,506 (72.0) 5,552 (15.6) 18,078 (50.9) 11,877 (33.5) 2030 31,299 (64.4) 4,086 (13.1) 15,494 (49.5) 11,718 (37.4) 2040 26,525 (57.2) 3,611 (13.6) 12,775 (48.2) 10,139 (38.2) 2050 22,424 (53.0) 3,291 (14.7) 9,957 (44.4) 9,176 (40.9)
  • 12. www.krivet.re.kr Estimated Change in Population and Aging of the Population (1990-2050) Note: The Share of young population refers to the population aged 0 to 15, while the aged population refers to those aged over 65. Source: National Statistics Office, Estimate on the Population of the Future (Each Year). (Unit: thousand, percent) 1990 1995 2000 2005 2015 2010 2018 2030 2040 2050 Population Total (Unit:1,000 people) 42,869 45,093 47,008 48,138 49,,277 48,875 49,340 48,635 46,340 42,343 Share of young population 25.6 23.4 21.1 19.2 13.7 16.2 12.7 11.4 10.3 8.9 Share of aged population 5.1 5.9 7.2 9.1 17.6 11.0 15.6 24.3 14.3 38.2
  • 13. www.krivet.re.kr Total Fertility Rates, 1970-2008 Source: NSO. Various Years. (Unit: percent) Year Rate Year Rate 1970 4.53 2000 1.47 1975 3.47 2004 1.16 1980 2.83 2005 1.08 1990 1.59 2006 1.13 1995 1.65 2008 1.19
  • 14. www.krivet.re.kr Pace of Aging by Country Source: National Statistics Office, Estimate on the Population of the Future (Each Year). Classification Year reached Year spent 7% 14% 20% 7%-->14% 14%-->20% Japan 1970 1994 2006 24 12 France 1864 1979 2019 115 40 Germany 1932 1972 2010 40 38 U.K 1929 1976 2020 47 44 Canada 1945 2010 2024 65 14 Australia 1939 2012 2030 73 18 Sweden 1887 1972 2011 85 39 Norway 1885 1977 2021 92 44 Italy 1927 1988 2008 61 20 U.S.A 1942 2015 2036 73 21 Korea 2000 2018 2026 18 8
  • 15. www.krivet.re.kr Dependency Ratio of Elderly and Index of Aging Note : 1) Dependency ratio of elderly = (population 65 years over /population 15~64) × 100. * The number of persons aged 65 years or over per one hundred persons 15 to 64 years. 2) Index of aging = (population 65 years over/population 0~14) × 100. 3) Working age population of per aging(person) = population 15~64/population 65 years over. Source : NSO. Estimate on the population of the future. (Unit : million) 1990 2000 2010 2016 2019 2020 2030 2040 Dependency ratio of elderly1) 7.4 10.1 15.0 18.2 20.6 21.7 37.7 56.7 Index of aging2) 20.0 34.3 67.7 100.7 119.0 125.9 213.8 314.8 Working age population of per aging(person)3) 13.5 9.9 6.6 5.5 4.9 4.6 2.7 1.8
  • 16. www.krivet.re.kr Dependency Ratio of Elderly in Major Countries Source: UN. World Population Prospects. The 2002 Revision. NSO(2005). “Special Estimate on the Population of the Future” . 1980 1990 2000 2030 2050 Korea 6.1 7.4 10.0 37.3 69.4 U.S.A 16.9 18.9 18.6 32.9 34.9 Japan 13.4 17.2 25.2 51.7 71.3 U.K 23.5 24.1 24.1 40.1 47.3 France 21.9 21.3 24.5 39.8 46.7 OECD Average 18.0 18.8 20.6 37.5 48.9
  • 17. www.krivet.re.kr 3. Civilian Participation Rates and Unemployment Rates of Aging Population (60 years over) Notes: 1) Civilian Participation Rates=The number of economically active population/number of population refer to age)×100. 2) Unemployment Rates =(The number of unemployment/ the number of economically active population)×100. Source: KSO, Annual Report on Economically Active Population (Each Year). (Unit: %) Classification Civilian Participation Rates 1) Unemployment Rates 2) Total 60~64year 65year above Total 60~64year 65year above 1990 35.6 53.8 26.1 0.4 0.6 0.2 1995 38.8 58.4 27.9 0.4 0.7 0.1 2000 38.2 54.3 29.6 1.5 2.3 0.6 2001 38.5 54.8 30.0 1.2 2.0 0.5 2002 39.1 55.9 30.7 1.0 1.6 0.5 2003 36.6 52.7 28.7 1.0 1.7 0.4 2004 37.3 53.7 29.8 1.2 1.7 0.7 2005 37.4 54.5 30.0 1.3 2.1 0.7 2006 37.9 55.8 30.5 1.4 2.3 0.7 2007 38.6 56.3 31.3 1.4 2.3 0.7 2008 37.7 55.1 30.6 1.2 1.7 0.8
  • 18. www.krivet.re.kr Civilian Participation Rates of aged 65 over in OECD Countries Source : http://stats.oecd.org. (Unit : %) Korea U.S.A Germany Netherland Iceland Sweden Japan UK 2004 29.8 14.4 2.8 3.9 17.5 9.3 19.8 6.1 2009 30.1 17.2 4.1 5.6 35.0 12.7 20.1 7.8
  • 19. www.krivet.re.kr 4. Structure of Employment by Aging Population Proportion of Employment Composition by Employment Status 65 above Source : NSO.「Survey on economically active population 」(Each Year) Note : 1) Included self-employed worker with employer (Unit : %) Total Own Account Workers1) Unpaid family worker Employees Regular Workers Temporary Workers Daily Workers 2008 100.0 49.1 11.9 39.0 9.0 18.4 11.6 2009 100.0 46.4 11.4 42.2 10.0 21.3 10.8 Male 100.0 56.9 2.1 41.0 14.0 19.1 7.8 Female 100.0 31.9 24.4 43.8 4.6 24.3 14.9
  • 20. www.krivet.re.kr Level of Monthly Wages in Employment 65 Years over (Monthly Wage = 100) Male Female
  • 21. www.krivet.re.kr Level of Monthly Wage in Employment in 65 Years over by Sex Note : Company of employee above 5 wage = based on monthly wage. Source: Ministry of Employment and Labor,「Survey on Working Condition by Employment Composition」 (Each Year). (Unit: Monthly Wage of Employees = 100) 1991 1994 1997 2004 2005 2006 2007 2008 2009 65 above 106.5 98.7 90.4 79.6 78.2 81.6 82.4 82.7 80.2 Male 124.5 109.2 98.8 85.2 83.5 86.4 87.4 88.7 86.4 Female 56.6 57.0 56.9 57.3 54.7 59.5 58.5 57.9 56.2
  • 22. www.krivet.re.kr Changes of Major Population and Statistics Notes: 1) Proportion of per 1,000 person3 by population, 2) Increasing Population Rate of Previous year. Source: NSO. “Population Projections for Korea: 2005-2-50”. 1950 1960 1970 1980 1990 2000 2005 2010 2030 2050 Life Expectancy in Birth Male 46.0 53.6 58.7 61.8 67.3 72.3 75.1 76.1 79.8 82.9 Female 49.0 56.9 65.6 70.0 75.5 79.6 81.9 82.9 86.3 88.9 Total Fertility Rates 5.40 5.63 4.53 2.23 1.59 1.47 1.08 - - - Crude Death Rate 1) - - 8.0 7.3 5.8 5.2 5.0 5.8 9.6 16.0 Increasing Rates of Population 2) - 3.09 2.21 1.57 1.15 0.84 0.21 0.26 -0.25 -1.07
  • 23. www.krivet.re.kr Fertility Rates, Employment Patterns and Labor Force Participation during the 1970-2010 Sources: http://esa.un.org/unpp 2009. Country Total Fertility Rates (%) 1970-1975 1995-2000 2005-2010 Korea 4.28 1.51 1.22 U.S.A 2.02 1.99 2.09 U. K 2.04 1.70 1.84 France 2.31 1.76 1.89 Germany 1.64 1.34 1.32 Brazil 4.72 2.45 1.90 Russia 2.03 1.25 1.37 India 5.26 3.46 2.76 Japan 2.13 1.37 1.27 China 4.77 1.80 1.77 World average 4.32 2.82 2.56
  • 24. III. Reasons and Effects of Aging Population Reasons of Aging Population Population ageing is caused by sustained low fertility and increasing life expectancy, which has resulted in proportionally fewer children in the population. - Birthrate; about 1.16 births per woman aged 15 to 49 in 2008. - Korea had one of the world's lowest percentages of those over the age of 65, at 3.1 percent. - In 2050, the estimated proportion of elderly will be 38.2% of the Korean population from less than 5.1% in 1990. www.krivet.re.kr
  • 25. Effects of Aging Population The impact of aging population on whole economy www.krivet.re.kr
  • 26. www.krivet.re.kr Negative Aspect of Aging Population Aging Population (Low Fertility) Decreasing of Potential Growth Increasing Consumption & Decreasing Saving (Investment Contraction) Rapid Increasing of Pension and Medical Expense (Deep Deficit) Decreasing of Labor Force Decreasing of Labor Productivity
  • 27. Worker Aspect Increased desire for wage hikes: With increased difficulties in life in later years workers’ desire for wage hikes increases → Causing labor cost burdens on companies Surging requirements for employment stability: Resistance for reorganization focused on ages along with requirement for employment guarantees (systemized retirement age or extension) → Emerging as a core issue between employer- employee www.krivet.re.kr
  • 28. Company Aspect Increased cost burdens: With the increased number of aged workers (high-waged workers) company labor cost burdens increase → Directly linked to pressure for reorganization www.krivet.re.kr
  • 29. IV. Policies for Aging Population □ A policy perspective the aging of the Korea’s population presents a number of major challenges. □ Aging population tends to work and save less. □ Require more health care and rely on social pensions for a large part of their income. □ Political and economical perspectives - Politically: It might become more difficult to adopt certain policies, such as cutting health and pension benefits. - Economically: There will be increased stress on working population, whose taxes pay for health and pension of their elders.
  • 30. 1. Human Capital Stock Rising 2. Increasing the productivity of the Old-Aged People through active vocational training 3. Providing Opportunities for Lifelong Education & Training 4. Measures to Use Aged Manpower 5. Increasing the Employability of the Aged www.krivet.re.kr
  • 31. K R I V E T Thank You.Thank You.