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BOK Working Paper No.2017-22, Demographic Policies against Aging in OECD countries

Economic Research Institute (+82-759-5481) 2017.07.16 5219

Title : Demographic Policies against Aging in OECD countries

Author : Jinill Kim(Korea University), Kyounghoon Park(BOK)


<Abstract>


In most advanced economies, population aging has been happening due to low fertility and long life expectancy, which has increased the burden of supporting the elderly and lowered the share of working-age population. Many countries have embarked on demographic policies against a decrease in potential growth due to low fertility and fast aging, an increase in cost of social security, and inter-generational conflicts between the young and the old. This paper researches on various policies by OECD countries focusing on work-family balance, pension reform, employment policies, and immigration policies; we also provide some lessons for Korea by comparing its demographic policies with other OECD countries. Demographic policies against aging have succeeded only when they are combined in an effective manner with work-family balance, pension reform, employment policies, and immigration policies. Especially, it is necessary to lower the wage differential between genders and to change the sociocultural understanding of childbirth and childbearing. As for pension reform, it is recommended to adjust the qualifying age of the national pension and to cooperate with private pension providers in order to enhance the sustainability of the pension system. At the same time, the system should be able to help the elderly secure income after retirement to prevent elderly poverty; to this end, the blind spot of the pension system needs to be resolved, such as low income earners and temporary workers. With respect to employment policies, it is necessary to adopt a division of labor between the elderly and the youth, along with age specific policies. More specifically, employment services tailored for the elderly may support job searching and help them to continue previous careers; in the youth front, active labor market policies will increase youth employment, such as combining education with job training. Finally, it is about time to decide on Korea’s position on immigration policies—in terms of both employment policies and demographic policies with more inclusive stance for foreign workers.

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