On demographic change in East Asia: An interview with Karen Eggleston

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.