SEOUL ¨C Asia is aging fast: by 2040, 16 percent of the region¡¯s population will be older than 65, more than double the 7.8 percent share in 2015. While the rise in healthy life expectancy is a positive development, this demographic shift poses a serious threat to many economies, which are already losing vitality.
A consistent supply of young, skilled workers was an essential ingredient of Asia¡¯s rapid economic catch-up process over the last three decades. But that process is now over, and middle-income countries like China and Vietnam are now facing accelerating population aging. In South Korea, the working-age population (15-64 years) will shrink by 10 percent from 2017 to 2030.
Against this background, the only way to sustain the labor supply ¡ª aside from immigration ¡ª is to keep people in employment beyond the traditional retirement age. The good news is that a growing number of seniors in Asia are already working. According to the OECD, the share of working South Koreans aged 65-69 was as high as 45 percent and 33 percent for 70-74-year-olds in 2016.
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