IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/116543.html

Taiwan’s Rapidly Aging Population: A Crisis in the Making?

Author

Listed:
  • Chen, Chien-Hsun

Abstract

A rapidly aging population became a pressing demographic issue in Taiwan in the 1990s due to industrial transformation, family planning and urbanization in the 1970s and 1980s. An aging population tends to lead to less human capital and lower economic growth. The percentage of population aged 65 and above was 13.2% in 2016, while the figure is expected to jump to 16.0% by 2020 and 19.8% by 2025. Taiwan’s total population is projected to register a negative growth rate by 2025. The spike in old-age dependency ratios will deeply affect future labor markets. As the population ages, the working-age population has experienced a declining trend since 2015. Indeed, an aging population is expected to slow down economic growth and raise government spending on social welfare and health care programs, negatively impacting future fiscal sustainability. An enlarging aging population has turned out to be a politically strong force to be reckoned with during elections. Long-term care insurance products could reduce family burden and provide high quality long-term care. It supplements old-age support provided mostly by the family in accordance with Taiwanese cultural values; the family hence still plays a pivotal role in long-term care.

Suggested Citation

  • Chen, Chien-Hsun, 2023. "Taiwan’s Rapidly Aging Population: A Crisis in the Making?," MPRA Paper 116543, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:116543
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/116543/1/MPRA_paper_116543.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Carmen M. Reinhart & Kenneth S. Rogoff, 2010. "Growth in a Time of Debt," American Economic Review, American Economic Association, vol. 100(2), pages 573-578, May.
    2. Carmen M. Reinhart & Vincent R. Reinhart & Kenneth S. Rogoff, 2012. "Public Debt Overhangs: Advanced-Economy Episodes since 1800," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 69-86, Summer.
    3. Martin Feldstein, 2016. "Dealing with Long-Term Deficits," American Economic Review, American Economic Association, vol. 106(5), pages 35-38, May.
    4. Yen-hsin Alice Cheng & Elke Loichinger, 2017. "The Future Labor Force of an Aging Taiwan: The Importance of Education and Female Labor Supply," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 36(3), pages 441-466, June.
    5. Adam, Christopher S. & Bevan, David L., 2005. "Fiscal deficits and growth in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 571-597, April.
    6. Benedict J. Clements & Kamil Dybczak & Vitor Gaspar & Sanjeev Gupta & Mauricio Soto, 2015. "The Fiscal Consequences of Shrinking Populations," IMF Staff Discussion Notes 15/21, International Monetary Fund.
    7. Wen-Hsin Huang & Yen-Ju Lin & Hsien-Feng Lee, 2019. "Impact of Population and Workforce Aging on Economic Growth: Case Study of Taiwan," Sustainability, MDPI, vol. 11(22), pages 1-13, November.
    8. Kuo-Feng Wu & Jin-Li Hu & Hawjeng Chiou, 2021. "Degrees of Shortage and Uncovered Ratios for Long-Term Care in Taiwan’s Regions: Evidence from Dynamic DEA," IJERPH, MDPI, vol. 18(2), pages 1-17, January.
    9. Yung-Ming Shiu, 2005. "The Future of Pensions in Taiwan," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 30(4), pages 593-603, October.
    10. Cai, Jie & Stoyanov, Andrey, 2016. "Population aging and comparative advantage," Journal of International Economics, Elsevier, vol. 102(C), pages 1-21.
    11. Charles I. Jones, 2022. "The End of Economic Growth? Unintended Consequences of a Declining Population," American Economic Review, American Economic Association, vol. 112(11), pages 3489-3527, November.
    12. Hsieh, Kevin Yu-Ching & Tung, An-Chi, 2016. "Taiwan’s National Pension Program: A remedy for rapid population aging?," The Journal of the Economics of Ageing, Elsevier, vol. 8(C), pages 52-66.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Talknice Saungweme & Nicholas M. Odhiambo, 2020. "The Impact of Domestic and Foreign Public Debt on Economic Growth: Empirical Evidence from Zimbabwe," Economia Internazionale / International Economics, Camera di Commercio Industria Artigianato Agricoltura di Genova, vol. 73(1), pages 77-106.
    2. Shaukat, Mughees & Mirakhor, Abbas & Krichene, Noureddine, 2013. "Fragility Of Interest-Based Debt Financing: Is It Worth Sustaining A Regime Uncertainty?," MPRA Paper 56362, University Library of Munich, Germany.
    3. Swamy, Vighneswara, 2015. "Government Debt and Economic Growth – Decomposing the Cause and Effect Relationship," MPRA Paper 64105, University Library of Munich, Germany.
    4. Vighneswara Swamy, 2015. "The Dynamics of Government Debt and Economic Growth," IEG Working Papers 359, Institute of Economic Growth.
    5. Lea Steininger & Casimir Hesse, 2024. "Buying into new ideas: The ECB’s evolving justification of unlimited liquidity," Department of Economics Working Papers wuwp357, Vienna University of Economics and Business, Department of Economics.
    6. Slimani, Slah & Bakari, Sayef & Othmani, Abdelhafidh, 2015. "Croissance et Soutenabilité de la Dette Extérieure Tunisienne pour la Période 1970-2012 : Une Analyse Dynamique [Growth and Sustainability of Tunisian External Debt for the Period 1970-2012: A Dynamic Analysis]," MPRA Paper 80954, University Library of Munich, Germany.
    7. İbrahim Özmen & Mihai Mutascu, 2024. "Public Debt and Growth: New Insights," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 8706-8736, June.
    8. Janice Boucher Breuer & John McDermott, 2019. "Debt And Depression," Contemporary Economic Policy, Western Economic Association International, vol. 37(4), pages 714-730, October.
    9. repec:spo:wpmain:info:hdl:2441/3l2vounfl99nvqsr0k24sn3k5l is not listed on IDEAS
    10. Haytham Y.M. Ewaida, 2017. "The Impact of Sovereign Debt on Growth: An Empirical Study on GIIPS versus JUUSD Countries," European Research Studies Journal, European Research Studies Journal, vol. 0(2A), pages 607-633.
    11. Balázs Égert, 2015. "Public debt, economic growth and nonlinear effects: Myth or reality?," Journal of Macroeconomics, Elsevier, vol. 43(C), pages 226-238.
    12. Nicholas Oulton, 2013. "Medium and long run prospects for UK growth in the aftermath of the financial crisis," Discussion Papers 1307, Centre for Macroeconomics (CFM).
    13. Rebeca Jimenez-Rodriguez & Araceli Rodríguez-López, 2015. "What happens to the relationship between public debt and economic growth in European countries?," Economics and Business Letters, Oviedo University Press, vol. 4(4), pages 151-160.
    14. Reinhart, Carmen M. & Reinhart, Vincent & Rogoff, Kenneth, 2015. "Dealing with debt," Journal of International Economics, Elsevier, vol. 96(S1), pages 43-55.
    15. Balẳ Égert, 2015. "The 90% public debt threshold: the rise and fall of a stylized fact," Applied Economics, Taylor & Francis Journals, vol. 47(34-35), pages 3756-3770, July.
    16. Yannis Dafermos, 2015. "The ‘other half’ of the public debt–economic growth relationship: a note on Reinhart and Rogoff," European Journal of Economics and Economic Policies: Intervention, Edward Elgar Publishing, vol. 12(1), pages 20-28, April.
    17. Kamanda Espoir, Delphin, 2024. "Investigating the dynamic impacts of public debt on economic growth in the Democratic Republic of Congo: a case of quantile on quantile regression," MPRA Paper 122415, University Library of Munich, Germany.
    18. repec:cii:cepiei:2015-q1-141-4 is not listed on IDEAS
    19. Andersson, Fredrik N. G. & Jonung, Lars, 2022. "The Risks of Adopting the Bond Yield as the Anchor for the EU Fiscal Framework," Working Papers 2022:1, Lund University, Department of Economics.
    20. Mughees Shaukat & Datuk Othman Alhabshi, 2015. "Instability of Interest Bearing Debt Finance and the Islamic Finance Alternative By Mughees Shaukat & Datuk Othman Alhabshi," Islamic Economic Studies, The Islamic Research and Training Institute (IRTI), vol. 23, pages 29-84.
    21. Alexander Chudik & M. Hashem Pesaran & Kamiar Mohaddes, 2020. "Identifying Global and National Output and Fiscal Policy Shocks Using a GVAR," Advances in Econometrics, in: Essays in Honor of Cheng Hsiao, volume 41, pages 143-189, Emerald Group Publishing Limited.
    22. Bartak, Jakub & Jabłoński, Łukasz & Tomkiewicz, Jacek, 2022. "Does income inequality explain public debt change in OECD countries?," International Review of Economics & Finance, Elsevier, vol. 80(C), pages 211-224.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J11 - Labor and Demographic Economics - - Demographic Economics - - - Demographic Trends, Macroeconomic Effects, and Forecasts
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:116543. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.