1Aging and its Impact on Economy--- What is going on in Japan and what Korea faces toApril 26, 2013Kosuke MotaniChief Seni...
2Silver Tsunami, or Aging Baby Boomers, in JapanAge15-64 43.0 MillionAge65&Over3.4 Million
3Many Were Born under Political EncouragementMany Were Born with Survivors’ Joys for PeaceAge15-64 49.7 MillionAge65&Over4...
4Angry Youth Protested to ConservativeGovernment, with Unconscious Fear thatMany of Them Would not Get Jobs.Age15-64 60.0 ...
5Baby Boomers Joined LaborMarket, Contributed to ExportBoom, and Brought Japan’s “RapidGrowth.”Age15-64 71.6 MillionAge65&...
6Baby Boomers Forming Young FamiliesEnlarged Domestic Demands, GivingJapan “Steady Growth. “Age15-64 78.9 MillionAge65&Ove...
7Baby Boomers, Being Twice More than TheirParents, Eagerly Bought New Houses andBrought House-Construction Boom.Age15-64 8...
8BB Juniors EnteredLabor Market underRecession, IncreasingEmployment andUnemployment at theSame Time. Age15-64 87.2 Millio...
9Aging Baby BoomersStarted Consuming Less.Age15-64 86.2 MillionAge65&Over22.0 MillionSilver Tsunami, or Aging Baby Boomers...
10Rapid Increase of Late-Seniors Makes SocialWelfare SystemMalfunctioningRetiring Baby BoomersConsume Even Less.Rapid Decr...
11Dramatic Decrease of WorkingAge Population, Even Though theProspects Assumes Record-highInflow of Foreign Immigration.Ag...
12Age15-64 67.7 MillionAge65&Over36.9 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
13Age15-64 57.9 MillionAge65&Over38.7 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
14Age15-64 50.0 MillionAge65&Over37.7 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
15Age15-64 44.2 MillionAge65&Over34.6 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
16Silver Tsunami is also Hitting KoreaAge15-64 17.2 MillionAge65&Over1.0 Million
17Silver Tsunami is also Hitting KoreaAge15-64 23.3 MillionAge65&Over1.5 Million
18Silver Tsunami is also Hitting KoreaAge15-64 30.1 MillionAge65&Over2.2 Million
19Silver Tsunami is also Hitting KoreaAge15-64 33.0 MillionAge65&Over3.4 Million
20Silver Tsunami is also Hitting KoreaAge15-64 34.8 MillionAge65&Over5.4 Million
21Silver Tsunami is also Hitting KoreaAge15-64 36.6 MillionAge65&Over8.1 Million
22Silver Tsunami is also Hitting KoreaAge15-64 32.9 MillionAge65&Over12.8 Million
23Silver Tsunami is also Hitting KoreaAge15-64 28.9 MillionAge65&Over16.7 Million
24Silver Tsunami is also Hitting KoreaAge15-64 25.4 MillionAge65&Over18.3 Million
25Silver Tsunami is also Hitting KoreaAge15-64 21.9 MillionAge65&Over18.2 Million
26Age15-64 1.20 MillionAge65&Over0.07 MillionMigration does not Count in Aging Singapore
27Age15-64 1.65 MillionAge65&Over0.12 MillionMigration does not Count in Aging Singapore
28Age15-64 2.20 MillionAge65&Over0.17 MillionMigration does not Count in Aging Singapore
29Age15-64 2.86 MillionAge65&Over0.29 MillionMigration does not Count in Aging Singapore
30Age15-64 3.59 MillionAge65&Over0.50 MillionMigration does not Count in Aging Singapore
31Age15-64 3.66 MillionAge65&Over0.93 MillionMigration does not Count in Aging Singapore
32Age15-64 3.25 MillionAge65&Over1.50 MillionMigration does not Count in Aging Singapore
33Age15-64 3.02 MillionAge65&Over1.77 MillionMigration does not Count in Aging Singapore
34Age15-64 2.94 MillionAge65&Over1.70 MillionMigration does not Count in Aging Singapore
35Foreign Immigrants Can be a Solution?Population levelas if those hadlived in Singaporein 1990 have gotolder for next 20y...
36Increase due toforeigners’ inflowForeign Immigrants Ends in more SeniorsPopulation level as if those hadlived in Singapo...
37China: Dynamic Emerging and MaturingAge15-64 457 MillionAge65&Over35 Million
38China: Dynamic Emerging and MaturingAge15-64 586 MillionAge65&Over47 Million
39China: Dynamic Emerging and MaturingAge15-64 755 MillionAge65&Over63 Million
40China: Dynamic Emerging and MaturingAge15-64 855 MillionAge65&Over86 Million
41China: Dynamic Emerging and MaturingAge15-64 973 MillionAge65&Over111 Million
42China: Dynamic Emerging and MaturingAge15-64 996 MillionAge65&Over167 Million
43China: Dynamic Emerging and MaturingAge15-64 983 MillionAge65&Over233 Million
44China: Dynamic Emerging and MaturingAge15-64 916 MillionAge65&Over317 Million
45China: Dynamic Emerging and MaturingAge15-64 870 MillionAge65&Over331 Million
46Japan: Already Aged and Still Aging
47Korea: Not Yet Aged but Will Age Rapidly
48China: Not Yet Aged but Will Age Rapidly
49Singapore: Not Yet Aged but Will Age Rapidly
500% 10% 20% 30% 40% 50% 60% 70% 80%Senior Age Population ÷ Working Age Population0%20%40%60%80%Junior Age Population ÷ Wo...
51Americans Also Aging But Dying Earlier0% 10% 20% 30% 40% 50% 60% 70%Senior Age Population ÷ Working Age Population0%20%4...
52Japan’s Working Age Population Peaked in 1995
53In Japan, Change in Working Age PopulationDecides Change in # of Those Employed
54Decreasing Employment in Japan
55Working Age Population affects Economy
56Disparity between Income and ConsumptionIncreasing Exports Ended inIncrease of Personal Incomeof Senior & Rich Investors...
57☆ Modern Machineries with IT substitute humanlabor in factories, increase laborproductivity and keep production level.★ ...
58Social Security Expense and AgingTotal Expense: Exact Correlation to Late Senior Age PopulationGovernment Spending: Rapi...
59Medical and Care for Aged ExpenseTotal Expense: Exact Correlation to Late Senior Age PopulationGovernment Spending: Rise...
60Medical and Care for Aged ExpenseTotal Expense: Increasing Faster than Late Senior Age PopulationGovernment Spending: Ro...
61Unemployed Female would Save UsSenior Citizens in Japan Do Not Consume as They Did When Young3,4098271,6828551,655869Ful...
62☆ Let younger generation get the financialassets; through accelerated inheritance withtax incentives, promoting consumpt...
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Leading Regional Economist Gives Timely Insight into Aging & the Economy

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On April 26, 2013 the Asia Society Korea Center had the honor of hosting Mr. Kosuke Motani, the Chief Economist of the Japan Research Institute, during its April Monthly Luncheon. In his lecture titled “Aging and Its Impact on Economy: What is going on in Japan and what Korea faces to,” Mr. Motani explored the intricate relationship between an aging population and a nation’s economy. By analyzing demographical patterns in Japan, he was able to present a comparison to Korea’s situation as well as valuable insights for its future.

To learn more about the Asia Society Korea Center, please visit: http://asiasociety.org/korea

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Leading Regional Economist Gives Timely Insight into Aging & the Economy

  1. 1. 1Aging and its Impact on Economy--- What is going on in Japan and what Korea faces toApril 26, 2013Kosuke MotaniChief Senior Economist, EconomistDepartmentJapan Research Institute, Limitedkosuke@motani.com
  2. 2. 2Silver Tsunami, or Aging Baby Boomers, in JapanAge15-64 43.0 MillionAge65&Over3.4 Million
  3. 3. 3Many Were Born under Political EncouragementMany Were Born with Survivors’ Joys for PeaceAge15-64 49.7 MillionAge65&Over4.1 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  4. 4. 4Angry Youth Protested to ConservativeGovernment, with Unconscious Fear thatMany of Them Would not Get Jobs.Age15-64 60.0 MillionAge65&Over5.4 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  5. 5. 5Baby Boomers Joined LaborMarket, Contributed to ExportBoom, and Brought Japan’s “RapidGrowth.”Age15-64 71.6 MillionAge65&Over7.3 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  6. 6. 6Baby Boomers Forming Young FamiliesEnlarged Domestic Demands, GivingJapan “Steady Growth. “Age15-64 78.9 MillionAge65&Over10.7 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  7. 7. 7Baby Boomers, Being Twice More than TheirParents, Eagerly Bought New Houses andBrought House-Construction Boom.Age15-64 85.9 MillionAge65&Over14.9 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  8. 8. 8BB Juniors EnteredLabor Market underRecession, IncreasingEmployment andUnemployment at theSame Time. Age15-64 87.2 MillionAge65&Over18.3 MillionSilver Tsunami, or Aging Baby Boomers, in JapanReached Maximum.
  9. 9. 9Aging Baby BoomersStarted Consuming Less.Age15-64 86.2 MillionAge65&Over22.0 MillionSilver Tsunami, or Aging Baby Boomers, in JapanStarted Decreasing
  10. 10. 10Rapid Increase of Late-Seniors Makes SocialWelfare SystemMalfunctioningRetiring Baby BoomersConsume Even Less.Rapid Decrease of Working AgePopulation Brings Inevitable Shrinkof Domestic DemandMany BB Juniors’Suffering from LowWages of UnstableJobs Makes TheirConsumption Weak.Age15-64 81.7 MillionAge65&Over29.5 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  11. 11. 11Dramatic Decrease of WorkingAge Population, Even Though theProspects Assumes Record-highInflow of Foreign Immigration.Aging BB Juniors WillStart Consuming Less. Ultra Rise ofthe Late-SeniorsAge15-64 73.4 MillionAge65&Over36.1 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  12. 12. 12Age15-64 67.7 MillionAge65&Over36.9 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  13. 13. 13Age15-64 57.9 MillionAge65&Over38.7 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  14. 14. 14Age15-64 50.0 MillionAge65&Over37.7 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  15. 15. 15Age15-64 44.2 MillionAge65&Over34.6 MillionSilver Tsunami, or Aging Baby Boomers, in Japan
  16. 16. 16Silver Tsunami is also Hitting KoreaAge15-64 17.2 MillionAge65&Over1.0 Million
  17. 17. 17Silver Tsunami is also Hitting KoreaAge15-64 23.3 MillionAge65&Over1.5 Million
  18. 18. 18Silver Tsunami is also Hitting KoreaAge15-64 30.1 MillionAge65&Over2.2 Million
  19. 19. 19Silver Tsunami is also Hitting KoreaAge15-64 33.0 MillionAge65&Over3.4 Million
  20. 20. 20Silver Tsunami is also Hitting KoreaAge15-64 34.8 MillionAge65&Over5.4 Million
  21. 21. 21Silver Tsunami is also Hitting KoreaAge15-64 36.6 MillionAge65&Over8.1 Million
  22. 22. 22Silver Tsunami is also Hitting KoreaAge15-64 32.9 MillionAge65&Over12.8 Million
  23. 23. 23Silver Tsunami is also Hitting KoreaAge15-64 28.9 MillionAge65&Over16.7 Million
  24. 24. 24Silver Tsunami is also Hitting KoreaAge15-64 25.4 MillionAge65&Over18.3 Million
  25. 25. 25Silver Tsunami is also Hitting KoreaAge15-64 21.9 MillionAge65&Over18.2 Million
  26. 26. 26Age15-64 1.20 MillionAge65&Over0.07 MillionMigration does not Count in Aging Singapore
  27. 27. 27Age15-64 1.65 MillionAge65&Over0.12 MillionMigration does not Count in Aging Singapore
  28. 28. 28Age15-64 2.20 MillionAge65&Over0.17 MillionMigration does not Count in Aging Singapore
  29. 29. 29Age15-64 2.86 MillionAge65&Over0.29 MillionMigration does not Count in Aging Singapore
  30. 30. 30Age15-64 3.59 MillionAge65&Over0.50 MillionMigration does not Count in Aging Singapore
  31. 31. 31Age15-64 3.66 MillionAge65&Over0.93 MillionMigration does not Count in Aging Singapore
  32. 32. 32Age15-64 3.25 MillionAge65&Over1.50 MillionMigration does not Count in Aging Singapore
  33. 33. 33Age15-64 3.02 MillionAge65&Over1.77 MillionMigration does not Count in Aging Singapore
  34. 34. 34Age15-64 2.94 MillionAge65&Over1.70 MillionMigration does not Count in Aging Singapore
  35. 35. 35Foreign Immigrants Can be a Solution?Population levelas if those hadlived in Singaporein 1990 have gotolder for next 20years, withoutgoing out of thecountry norbecoming deadIncrease due toforeigners’ inflow
  36. 36. 36Increase due toforeigners’ inflowForeign Immigrants Ends in more SeniorsPopulation level as if those hadlived in Singapore in 1990 havegot older for next 50years, without going out of thecountry nor becoming dead
  37. 37. 37China: Dynamic Emerging and MaturingAge15-64 457 MillionAge65&Over35 Million
  38. 38. 38China: Dynamic Emerging and MaturingAge15-64 586 MillionAge65&Over47 Million
  39. 39. 39China: Dynamic Emerging and MaturingAge15-64 755 MillionAge65&Over63 Million
  40. 40. 40China: Dynamic Emerging and MaturingAge15-64 855 MillionAge65&Over86 Million
  41. 41. 41China: Dynamic Emerging and MaturingAge15-64 973 MillionAge65&Over111 Million
  42. 42. 42China: Dynamic Emerging and MaturingAge15-64 996 MillionAge65&Over167 Million
  43. 43. 43China: Dynamic Emerging and MaturingAge15-64 983 MillionAge65&Over233 Million
  44. 44. 44China: Dynamic Emerging and MaturingAge15-64 916 MillionAge65&Over317 Million
  45. 45. 45China: Dynamic Emerging and MaturingAge15-64 870 MillionAge65&Over331 Million
  46. 46. 46Japan: Already Aged and Still Aging
  47. 47. 47Korea: Not Yet Aged but Will Age Rapidly
  48. 48. 48China: Not Yet Aged but Will Age Rapidly
  49. 49. 49Singapore: Not Yet Aged but Will Age Rapidly
  50. 50. 500% 10% 20% 30% 40% 50% 60% 70% 80%Senior Age Population ÷ Working Age Population0%20%40%60%80%Junior Age Population ÷ Working Age PopulationChinaSouth KoreaJapanJunior age: 0-14yrs old / Working age: 15-64yrs old / Senior age: 65yrs old and oveSource: World Population Prospects: The 2008 Revision, United NationsFigures include foreign residents数字には在留外国人を含むDecrease of Children and Increase of Senior Citiz1970-1980-1990-2000-2010-2020-2030-2040-2050年197019801980197019902000200019902010202020202050204020501970198019902000203020502040203020202010204020302010Korea, China and Japan: Time Difference
  51. 51. 51Americans Also Aging But Dying Earlier0% 10% 20% 30% 40% 50% 60% 70%Senior Age Population ÷ Working Age Population0%20%40%60%80%Junior Age Population ÷ Working Age PopulationSingaporeUSASouth KoreaEuropeJapanJunior age: 0-14yrs old / Working age: 15-64yrs old / Senior age: 65yrs old and ovSource: World Population Prospects: The 2008 Revision, United NationsFigures include foreign residentsDecrease of Children and Increase of Senior Citi1970-1980-1990-2000-2010-2020-2030-2040-2050年204020302020205020402030202020102000199019801970205020502050197019801990197020102040203020201980199020101990197020502020
  52. 52. 52Japan’s Working Age Population Peaked in 1995
  53. 53. 53In Japan, Change in Working Age PopulationDecides Change in # of Those Employed
  54. 54. 54Decreasing Employment in Japan
  55. 55. 55Working Age Population affects Economy
  56. 56. 56Disparity between Income and ConsumptionIncreasing Exports Ended inIncrease of Personal Incomeof Senior & Rich Investors.Increasing Retirement ofSenior Workers EnhancedFactories’ Productivity andEnded in Export Increase .Under Decreasing Working Age Population and Increasing Retirement,Increased Personal Income Did Not Trickle Down to Domestic Retail Sales.
  57. 57. 57☆ Modern Machineries with IT substitute humanlabor in factories, increase laborproductivity and keep production level.★ Decreasing working age population ends indecreasing # of workers and less amount ofgross wages, reducing the amount ofcommodities needed.☆ Stable production and decreasing needs resultin price drop and less demand.★ Seniors who own 83% of $14 trillion personalfinancial assets do not consume as muchmaterials as youths do, but just enjoy saving.Declining Working Age PopulationDecreases Demand, not SupplyNot a General Theory, but a “Inconvenient Reality” in Japan
  58. 58. 58Social Security Expense and AgingTotal Expense: Exact Correlation to Late Senior Age PopulationGovernment Spending: Rapid Rise due to Working Age Pop. DeclineEquivalent toAnnual Tax Incomeof NationalGovernment
  59. 59. 59Medical and Care for Aged ExpenseTotal Expense: Exact Correlation to Late Senior Age PopulationGovernment Spending: Rise due to Working Age Pop. Decline
  60. 60. 60Medical and Care for Aged ExpenseTotal Expense: Increasing Faster than Late Senior Age PopulationGovernment Spending: Rocket Rise due to Wrkng Age Pop. DeclineEquivalent to Half of Annual Tax Incomeof National Government
  61. 61. 61Unemployed Female would Save UsSenior Citizens in Japan Do Not Consume as They Did When Young3,4098271,6828551,655869Full-time WorkerPart-time WorkeUnemployedHouse WorkersStudentsOthers0 1000 2000 3000 4000 5000FemaleMaleSource: National Census# of Labors in Japan2005, Including ForeingersTen Tousands→
  62. 62. 62☆ Let younger generation get the financialassets; through accelerated inheritance withtax incentives, promoting consumption of richseniors by innovative product development, andraising wages by cutting off dividends.★ Let more women work, while raising theirwages.☆ Let more foreigners come to Japan, not towork as cheap labor but to travel around, stayin, live on and consume.★ Reforms of the systems of pension, medicaland care for senior citizens look urgent. Donot blame neither economy nor government,since the initial cause is the aging of all ofFour Suggestions I wrote in my Book

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