South Korea has the fourth largest economy in Asia. Unfortunately, South Korea is currently struggling with one of the four global economic issues: aging. South Korea is ranked 13 in the total population among Asian countries with 51.74 million (2021). However, it is anticipated that in 2025, 20% of the whole population will be at the age of 65 and over. By 2050, it is expected that the ratio will increase to as high as 44%.
Aging occurs when both the death and birth rate decreases. In South Korea, the death rate decreased due to improvements in medical treatment through its affordability in terms of cost and well-organized health insurance. Unlike the US where health insurance is owned by private companies, health insurance in South Korea is owned by the government. So, South Korea is among the 25 healthiest nations in the world in terms of life expectancy. Rankly speaking, the rising price of real estate is to blame for the birth rate decrease. With highers lead to lower birth rates as well. ging is a huge economic problem.
Are seniors unemployed? Yes, because they are not among the working-age population, which is defined as those aged 15 to 64. The current private companies in South Korea experience a shortage of qualified workers, which decreases the productivity of companies. WIth less productivity comes a delay in economic expansion to due a low net profit. This shortage in labor causes wage inflation as well. Aging does not stop the next year. The ratio of people over the age of 65 has increased over time, indicating that inflation will rise year after year creating a price/wage spiral, a macroeconomic theory that suggests that the rise of rage increases disposable income. With more income, demand for products will rise, leading to an increase in product prices and, ultimately, production costs.
To solve this economic problem, the South Korean government is strengthening income security for retirees, improving technologies to support companies’ productivity, and taking a leap to an aging-friendly economy. The government is also trying to encourage married individuals to have a child by providing them with economic support and finding Methods to lower the price of real estate.
Works Cited
Wikimedia Foundation. (2023, November 7). List of Asian countries by population. Wikipedia. https://en.wikipedia.org/wiki/List_of_Asian_countries_by_population
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Banton, C. (n.d.). Wage-price spiral: Definition and what it prohibits and protects. Investopedia. https://www.investopedia.com/terms/w/wage-price-spiral.asp Why do death rates decline?. NBER. (n.d.). https://www.nber.org/digest/mar02/why-do death-rates-decline
South Korea’s population shift: Challenges and opportunities. (n.d.). https://www.thelancet.com/journals/lanwpc/article/PIIS2666-6065(23)00183-9/fulltext
By. Jiheon Ryu