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East Asia's demographic landscape is rapidly changing and comparative academic research is crucial to help guide well-informed decisions in the many policy areas that are affected, such as security, economics, and immigration. From January 20 to 21, the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) gathered subject experts from numerous fields for two days of lively and productive presentations and dialogue to help identify key research issues and questions for its new, three-year research initiative on this significant subject.

Shorenstein APARC held a public panel discussion on January 20, featuring eight scholars from across the United States and Asia. The issue of aging featured prominently in their presentations, as did fertility rates and immigration. A full audio recording of the panel discussion is available on the Shorenstein APARC website and summaries of the presentations follow below. A closed-session workshop took place the next day, the discussions from which will serve as the foundation for future programs and publications related to the research initiative.

January 20 Panel Discussion Presentations

The link between demography and security is more tenuous in East Asia than in other parts of the world, suggested Brian Nichiporuk, a political scientist with the RAND Corporation. Nichiporuk discussed possible policy responses to demographic change in Japan, North and South Korea, the Russian Federation, and China. He suggested, for example, that Japan's new maritime security focus is related to perceived economic and political competition from China, which is magnified by its domestic demographic concerns.

Michael Sutton, a visiting fellow with the East-West Center in Washington, DC, stated that Japan's aging population would remain a major policy issue for the next 20–30 years. He emphasized that the policy challenges posed by this phenomena are complicated by the role that the United States plays in the regional security structure, and also by the growing dominance of China and the history that it shares with Japan. Nonetheless, maintained Sutton, despite the obvious challenges, it is possible for Japan and the other countries facing this demographic issue to successfully adapt.

Social attitudes and policy in East Asia do not favor immigration, as they do in European countries such as Spain and Italy, suggested John Skrentny, director of the Center for Comparative Immigration Studies at the University of California, San Diego. Skrentny focused his talk on low-skill immigrant workers in South Korea and Japan, noting that these two countries, which began receiving workers in the 1970s and 1980s, commonly associate immigrants with social disruption. According to Skrentny, immigration policy is often tied to economics and tends to favor co-ethnic workers.

Chong-En Bai
, chair of the Department of Economics at Tsinghua University, discussed numerous economic policy implications and responses related to demographic change in China. He noted areas where successful policies have been adopted but challenges still remain, including savings and investment, labor and urbanization, pension, healthcare, and long-term care. Bai described, for example, how the children of rural migrants now have access to urban schools, but that they still face the logistical challenge of having to travel back to their home provinces to take college entrance examinations.

Examining demographic change and health improvements is essential to understanding the significant economic growth in East Asia over the past several decades, emphasized David Bloom, chair of the Department of Global Health and Population at Harvard University. He noted the success of East Asian countries in lowering their infant mortality rates through investment in public health improvements, such as sanitation and vaccination. Bloom suggested that these and other past successful policy mechanisms have run their course, and that it is now imperative to find ways to address the region's key demographic issue of aging.

Naohiro Ogawa, director of the Population Research Institute at Nihon University, described findings from the National Transfer Accounts (NTA) project, an international effort to gauge economic flows across age groups. He discussed the pressure placed on Japan's working-age population by the increasing cost of caring for children and the elderly, as well as the challenges and possibilities related to having a large, healthy, aging population. Ogawa noted that institutional responses to demographic change, such as increasing the retirement age and adopting more open immigration policy, have moved slowly in Japan.

Andrew Mason, a professor of economics at the University of Hawai'i, Manoa, also utilized NTA data to make predictions about East Asia's economic future. He proposed that the amount of human capital, such as the money that parents spend on the education of their children, is likely to grow quite rapidly. He also suggested that financial wealth in East Asia is likely to increase significantly as the populations of its countries age. Finally, he suggested that the current trend of regional economic growth would continue, although at a somewhat steadier rate. Mason qualified his predictions with questions, such as whether the return on investment in education would be commensurate with what is spent.

James Raymo, a professor of sociology at the University of Wisconsin-Madison, described a wide array of findings about changes in fertility and family structure in Japan and their connections, as well as possible policy implications. Raymo discussed trends in marriage, childbearing, divorce, non-marital cohabitation, and the participation of women in the labor force. He pointed to gaps in current research, and suggested possible linkages to research on other demographic trends, such as Japan's aging population.

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In conjunction with its launch of a three-year research initiative to study the effects of demographic change in Asia, the Walter H. Shorenstein Asia-Pacific Research Center is pleased to announce the publication of Aging Asia: The Economic and Social Implications of Rapid Demographic Change in China, Japan, and South Korea. The book covers a diverse range of issues of demographic change, including intergenerational transfers in Japan, marriage and the elderly in China, pension reform in South Korea, and the Asia-Pacific diabetes epidemic.

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Shorenstein APARC
Stanford University
Encina Hall, Room C335
Stanford, CA 94305-6055

(650) 736-0771 (650) 723-6530
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2011 Shorenstein-Spolgi Fellow in Comparative Health Policy
Qiulin_Chen3x4.jpg MA, PhD

Qiulin Chen is a postdoctoral fellow of Shorenstein APARC and a member of the center's Asia Health Policy Program. His main interest of research is health economics and public finance, focusing on policy and outcome comparison of health care systems and Chinese health reform. His dissertation focused on performance comparison between public (or governmental) and private health care financing, between local and central government responsibility on health care, between contracted and integrated health care system. In particular, his dissertation examined under Chinese-style decentralization, known as fiscal decentralization with political centralization, how economic competition affect local government's behaviour on health investment, and why public contracted system obstructs health performance and provides one channel of such effects in terms of preventive care and public health. He is currently involved in a comparative research project on demographic change in East Asia based on the National Transfer Accounts data and analysis.

Chen's recent publication is "The changing pattern of China's public services" (with Ling Li and Yu Jiang) in Population Aging and the Generational Economy: A Global Perspective (Ronald Lee and Andrew Mason, editors), forthcoming 2011. Before studying in Stanford, he has published more than 10 papers in academic journals in Chinese, such as Jing Ji Yan Jiu (Economic Research) and Zhong Guo Wei Sheng Jing Ji (Chinese Health Economics), and 5 book chapters. He has participated in about 20 research projects, such as A Design of Framework for Healthcare Reform in China which is commissioned by the State Council Working Party on Health Reform, Strategy Planning Study of "Healthy China 2020" which is commissioned by the Minister of Health, and Health Challenge in the Aging Society and It's Policy Implication funded by Chinese National Natural Science Foundation.

Chen earned his Ph.D. in Economics from Peking University in 2010, and earned a B.A. in Business Administration from Nanjing University in 2001. From 2004 through 2008, he was Executive Assistant of the Director of the China Centre for Economic Research at Peking University (CCER). He is also a postdoctoral fellow of National School of Development at Peking University (Its predecessor is CCER).

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AgingAsia

In the past fifty years, two factors have led to global population aging: a decline in fertility to levels close to—or even below—replacement and a decline in mortality that has increased world average life expectancy by nearly 67 percent. As the population skews toward fewer young people and more elderly who live longer postretirement lives, demographic changes—labor force participation, savings, economic growth, living arrangements, marriage markets, and social policy—are transforming society in fundamental, irreversible ways.

Nowhere are these effects of aging and demographic change more acute—nor their long-term effects more potentially significant—than in the Asia-Pacific region. How will these developments impact the economies and social protection systems of Japan, South Korea, China, and, by extension, the United States?

To assess this question, Aging Asia showcases cutting-edge, policy-relevant research. The first section focuses on demographic trends and their economic implications; the second section approaches select topics from a global comparative perspective, including social insurance financing, medical costs, and long-term care.

Desk, examination, or review copies can be requested through Stanford University Press.

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 The Economic and Social Implications of Rapid Demographic Change in China, Japan, and South Korea

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Karen Eggleston
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Shorenstein APARC
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Demographic changes are profoundly shaping the political, economic, and social landscape of the Asia-Pacific region. How have individuals, families, communities, and policymakers responded? How should they? For example, how will national and social identities transform as population ageing strains traditions of filial piety and immigration disrupts ethnic homogeneity? Will the economies of East Asia languish, or will a "second demographic dividend" spur renewed economic growth? Demographic change can have important psychological and political effects. For example, can one seriously imagine a resurgent, militaristic Japan with a declining and aging population? The responses to demographic change in Japan, South Korea, China, and their neighbors will have great potential long-term effects in the Asia-Pacific region.

This panel discussion, the opening and public portion of a 1-1/2 day workshop that will define a research agenda for the next three years, will bring together selected outside experts and faculty within the Shorenstein Asia-Pacific Research Center for an interdisciplinary and comparative discussion of the policy responses to rapid demographic change in East Asia.

  • 3:00p.m. – 3:10p.m.
    Gi-Wook Shin, Director, Shorenstein Asia-Pacific Research Center, Stanford University: Introduction and welcome
  • 3:10p.m. – 3:25p.m.
    Brian Nichiporuk, RAND Corporation: The Security Implications of Demographic Trends in East Asia
  • 3:25p.m. – 3:40p.m.
    Michael Sutton, East-West Center, Washington, DC: Political & Security Implications of Population Aging in Japan
  • 3:40p.m. – 3:55p.m.
    John Skrentny, Director, Center for Comparative Immigration Studies, Professor of Sociology, University of California, San Diego: An East Asian Model to Managing Immigration? Durability & Change in the 2000s.
  • 3:55p.m. – 4:10p.m.
    Chong-En Bai, Chair, Department of Economics, Freeman Chair Professor of Economics, Tsinghua University: Policy Responses to Demographic Change in China
  • 4:10p.m. – 4:25p.m.
    David Bloom, Clarence James Gamble Professor of Economics and Demography Chair, Department of Global Health and Population, Harvard University: Demographic Change in East Asia: Challenges, Options and Evidence
  • 4:25p.m. – 4:40p.m.
    Naohiro Ogawa, Director, Population Research Institute, Nihon University: Population Aging & Changing Human Capital in Japan & other East Asian Countries
  • 4:40p.m. – 4:55p.m.
    Andrew Mason, Professor of Economics, University of Hawaii, Manoa & Senior Fellow, East-West Center, Hawaii: Population Aging and the Generational Economy: Key Findings
  • 4:55p.m. – 5:10p.m.
    James Raymo, Professor of Sociology, University of Wisconsin, Madison The “Second Demographic Transition” and family change in Japan
  • 5:10p.m. – 5:30p.m.
    Discussion/Conclusion

Bechtel Conference Center

Gi-Wook Shin Director Speaker Shorenstein Asia-Pacific Research Center, Stanford University
Andrew Mason Professor of Economics, University of Hawaii, Manoa & Senior Fellow Panelist East-West Center, Hawaii
Naohiro Ogawa Director, Population Research Institute Panelist Nihon University
David Bloom Clarence James Gamble Professor of Economics and Demography, Chair, Department of Global Health and Population Panelist Harvard University
Chong-En Bai Chair, Department of Economics, Freeman Chair Professor of Economics Panelist Tsinghua University
John Skrentny Director, Center for Comparative Immigration Studies, Professor of Sociology Panelist University of California, San Diego
Michael Sutton Panelist East-West Center, Washington, DC
Brian Nichiporuk Panelist RAND Corporation
James Raymo Professor of Sociology Panelist University of Wisconsin, Madison
Panel Discussions
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Professor Ogawa will present recent work on declining fertility and the rising cost of children in East Asian countries, using measures of investment per child from the National Transfer Accounts analysis of public and private investments in children's education and health. He and his co-authors also study whether the amount of resources allocated to children has been crowded out by the increasing amount of resources needed for support of the elderly in Japan and other aging societies.

Naohiro Ogawa is professor of population economics at the Nihon University College of Economics and Advanced Research Institute for Sciences and Humanities (ARISH), Tokyo. He is also Director of the Nihon University Population Research Institute (NUPRI). Over the past thirty years he has written extensively on population and development in Japan and other Asian countries. More specifically, his research has focused on issues such as socioeconomic impacts of low fertility and rapid aging, modeling demographics and social security-related variables, as well as policies related to fertility, employment, marriage, child care, retirement and care for the elderly. His recent work includes measuring intergenerational transfers. He has published numerous academic papers in internationally recognized journals. In collaboration with other scholars he has also edited several journals and books among which the most recent one is Population Aging, Intergenerational Transfers and the Macroeconomy (2007). Naohiro Ogawa has served on a number of councils, committees and advisory boards set up by the Japanese government and international organizations such as the Asian Population Association, the IUSSP and the WHO. He is currently an associate member of the Science Council of Japan.

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Naohiro Ogawa Professor of Population Economics Speaker the Nihon University
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Over the past year, the Walter H. Shorenstein Asia-Pacific Research Center (Shorenstein APARC) has engaged in leading-edge research on demographic change in East Asia. Karen Eggleston, director of the Asia Health Policy Program at Shorenstein APARC, discusses the recent book Aging Asia: The Economic and Social Implications of Rapid Demographic Change in China, Japan, and South Korea, and the workshop on the economic, social, and political/security implications of demographic change in East Asia, held January 20-21 at Shorenstein APARC.

Across Northeast Asia, countries are facing the issue of an aging population, which causes socio-economic challenges that have policy implications. You explore this phenomenon in your forthcoming book Aging Asia: The Economic and Social Implications of Rapid Demographic Change in China, Japan, and South Korea. When did aging begin to become an issue and what are some of the greatest factors that you address in the book?

Aging started at different times in the countries of East Asia. The country with the oldest life expectancy in the world and the oldest age structure of its population is Japan. It had a very short baby boom after the war and has had a steep decline in fertility. Mortality has also been falling around the world, and so this creates a change in the population. Japan is already at the fourth stage of demographic transition. South Korea is rapidly moving towards that and already has one of the lowest fertility rates in the world. Of course, neither of them have policies to reduce fertility; in fact, they are trying to encourage it. China, on the other hand, has long been trying to control fertility and is not as extreme in terms of the population age structure, but it is rapidly changing. China will be older in median age than the United States soon—this is not a trivial factor when you think in terms of the absolute size of the Chinese population.

One of the things that we wanted to study in this project is the premise that the demographic transition is a "problem." It is true that you need to think about and have policy responses to it. But it can also be seen as a sign of success, and as an opportunity. We wanted to reframe the issue and think about evidence on both sides. There is some research highlighted in the book, for example, that looks at the impact of population aging on economic growth, which is one of the first things that comes to many people's minds. For example, if you have a lot of elderly people, they are not in the work force and they need to be supported. It is true that this can be bad for economic growth, but there also are policy and individual responses that may moderate the effects. Our research is trying to highlight several different aspects of aging, including the question of opportunity. For example, there is more investment in individual children now and elderly persons' savings have actually contributed to economic growth. In some aspects, this has been a sign of resiliency for Japan where there are a lot of transfers to the working-age population.

Ronald Lee at the University of California, Berkeley and Andrew Mason at the East-West Center at the University of Hawai'i, who is participating in the January workshop, have been working on the concept of a "second demographic dividend." They find that as countries have an older age structure, there are more people that are saving. In the widely accepted "first demographic dividend," there are more people in the working-age part of the population—more people employed and more people contributing to the GDP. You get a boom contributing to growth. We know that this contributed to Japan and South Korea's earlier growth, and to China's in the 80s and part of the 90s, but only one or two percent of GDP. The question then is whether it is a problem that with aging you are losing that first demographic dividend. A second demographic dividend might arise because people who are preparing for a longer retirement life are saving more, and those savings are then invested in the economy and the investment drives economic growth.

Is there any correlation to demographic issues faced by the United States?

Interestingly, the aging issue is more pronounced in East Asia than in the United States for several reasons. We have a higher fertility rate than in Japan and South Korea, and many other countries in Europe as well. We also historically are much more open to immigration than most other countries, and this has led to a certain vitality in the population mix that has slowed the impact of demographic change. That said, of course, there are issues with having a lot of baby boomers. Sometimes, depending on the specific question or the specific area of policy, you find other factors that are much more important than aging. For example, the growth of healthcare spending has been in the news a lot lately. Although obviously there is an impact from having more elderly people, there are much bigger issues, such as what we are spending per person per age group and the growth of that spending. Just aging per se is not as big of an issue as people might think.

In late January, you will be holding the workshop Comparative Policy Responses to Demographic Change in East Asia: Defining a Research Agenda. What are the major issues you will explore in the conference? Who will be involved? Finally, what is the publication or research project that you will launch from this?

We had an Aging Asia conference in February 2009, co-sponsored with the Global Aging Program at the Stanford Center on Longevity. The outcome of this is the forthcoming volume, co-edited with Shripad Tuljapurkar of the Department of Biology at Stanford University. We started with a basic survey of the region and thought about the basic trends-demographic, social, and economic-and built upon that to figure out where the gaps are in the literature and where the interesting research questions are. That is where the January 2011 workshop comes in as the next step. We are bringing in some of the same and some different people to focus on three specific themes: economics, society, and politics/security. The upcoming event again focuses on East Asia and there will be a public component, but it is a smaller event and its main goal is to dig deeper into these themes to figure out an interesting research agenda on the policy responses to demographic transition.

We decided to focus again on East Asia, which is the research focus of a lot of our Shorenstein APARC faculty. Masahiko Aoki and Michael Armacost are going to chair sessions, and Gi-Wook Shin is going to kick it all off and talk about the social aspects of demographic change. Andrew Walder will be participating in that session as well. Thomas Fingar will be covering the political and security implications. All Shorenstein APARC faculty have been invited to participate and think about how this issue of demographic change—and particularly policy responses—might be related to their own areas of research. 

An illustration that I like to give when people ask about how demographic change is related to other things is from Andrew Walder when he was talking about China's transition in the 1980s. He received a question about whether or not there had been an impact from the One Child policy. He said that obviously there are many different impacts, but the one thing that he noted was that students in China now, especially if they are only children, are under a lot of career pressure. This has changed the space or the freedom for self-exploration. Why does this have broader implications? Young people see access to political power as one key for their careers and this changes their views about joining the Communist Party, which has big implications for China's political future. This is just one illustration of how we are trying to explore the broader implications of demographic change.

Finally, what is the outcome that you would most hope to achieve through Aging Asia and the upcoming demographic change workshop?

I think that the biggest hope would be to develop a much better understanding of what is going on with demographic change: what are the processes and how is society changing? What are the individual challenges that families are facing and what are they are doing about it? What is the broader social or even global perspective on how this is going to shape our future world? For me, I think about the world that my children are going to grow up in.

Through our research, I hope that we will impact not only the understanding of what has driven past developments, but create policy recommendations for each of the societies that were are examining—including our own—on the opportunities and the challenges related to changes in population. That hopefully will be useful as these different societies think about how to respond.

Our research on the economic, the social, and political/security aspects of demographic change is intended to be tangible for individuals and families as well as for broader national policy.

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