Population Aging and the Three Demographic Dividends in Asia

Asian Development Review 38:1

36 Pages Posted: 27 Apr 2021

See all articles by Naohiro Ogawa

Naohiro Ogawa

Nihon University

Norma Mansor

University of Malaya

Sang-Hyop Lee

University of Hawaii - Department of Economics

Michael R.M. Abrigo

Philippine Institute for Development Studies

Tahir Aris

Institute of Public Health, Ministry of Health, Malaysia

Date Written: March 25, 2021

Abstract

The present study first examines the trends in age structural shifts in selected
Asian economies over the period 1950–2050 and analyzes their impact on
economic growth in terms of the first and second demographic dividends
computed from the system of National Transfer Accounts. Then, using the
National Transfer Accounts, we analyze the effect of the age structural shifts
on the pattern of intergenerational transfers in Japan; the Republic of Korea;
and Taipei,China. A brief comparison of the results reveals that, in the
next few decades, the latter two are likely to follow in Japan’s footsteps by
increasing public transfers and asset reallocations, and by reducing familial
transfers, particularly among older persons. Next, we consider a newly defined
demographic dividend, which is generated through the use of the untapped work
capacity of healthy older persons and to which we refer as “the silver” or “the
third” demographic dividend. By drawing upon microlevel datasets obtained
from Japan and Malaysia, we calculate the magnitude of the impact of that
dividend on macroeconomic growth in each of the two economies, concluding
that while in Japan the expected effect is substantial, in Malaysia it will take
several decades before the country can enjoy comparable benefits.

Keywords: demographic dividends, intergenerational transfers, National Transfer Accounts, population aging

JEL Classification: J11, J14

Suggested Citation

Ogawa, Naohiro and Mansor, Norma and Lee, Sang-Hyop and Abrigo, Michael R.M. and Aris, Tahir, Population Aging and the Three Demographic Dividends in Asia (March 25, 2021). Asian Development Review 38:1, Available at SSRN: https://ssrn.com/abstract=3834462

Naohiro Ogawa (Contact Author)

Nihon University ( email )

Tokyo
Japan

Norma Mansor

University of Malaya ( email )

Faculty of Economics and Administration Building
Kuala Lumpur, 50603
Malaysia

Sang-Hyop Lee

University of Hawaii - Department of Economics ( email )

2424 Maile Way, SSB 542
Honolulu, HI 96822
United States
808-956-8590 (Phone)

Michael R.M. Abrigo

Philippine Institute for Development Studies ( email )

NEDA sa Makati Bldg.
106 Amorsolo St., Legaspi Village
Manilla, NCR 1229
Philippines

Tahir Aris

Institute of Public Health, Ministry of Health, Malaysia ( email )

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