Comment on “Population Ageing and Social Security in Asia”

• Date: 01 July 2015
• DOI: http://doi.org/10.1111/aepr.12099
• Author: Hal Hill
• Published date: 01 July 2015

Comment on “Population Ageing and Social

Security in Asia”

Hal HILL†

The Australian National University

JEL codes: I18, I38, J1

Chomik and Piggott (2015) pack in a remarkable amount of information to provide an

empirically rich and analytically rigorous examination of the public policy challenges

and options associated with population ageing and social security in developing Asia.

They stress the diversity of country approaches to these issues as well as the urgency of

establishing a clear policy framework that is equitable, sustainable, and has integrity.

Section 2 establishes the context of demographic and social change: this includes rapid

population ageing; the looming end to the period of demographic dividend, quicker for

some countries than others; rapid urbanization and migration; societal changes such as

rising female workforce participation; and, as incomes rise, increased community expec-

tations for the provision of retirement incomes and public health systems. A key message

is the need to establish a sound policy framework while populations are relatively young.

Latecomer developing countries have two major advantages in approaching these

issues. First, as compared to economic forecasting, likely demographic outcomes are

known with considerable accuracy over a period of decades, since the key drivers, fertil-

ity rates, mortality rates, life expectancy, and so on, can be modeled within known

ranges. Second, these countries can learn from the experiences, both positive and nega-

tive, of advanced countries. To this end, the paper usefully examines the lessons from the

region’s high-income countries: Australia, Japan, and Singapore. Nevertheless, for gov-

ernments with a short-term calculus, grappling with political survival and economic

volatility, and possessing limited bureaucratic capacity for implementing complex policy

reforms, the danger is that, by comparison, demographic challenges might appear to be

on the distant horizon and consideration of them can be deferred.

East Asia’s demographic diversity provides opportunities for international migration,

both temporary and permanent and, although referred to, perhaps more could havebeen

made of this. The demographic transition in some countries has been so rapid that they

have already entered the so-called demographic burden phase, while others have some

decades of demographic bonus in front of them, together with serious problems of labor

underutilization. This complementarity therefore potentially offers a win–win solution.

But it will need to be managed. The ageing societies need to make the cultural adaptation

to embrace open migration policies. This appears not to be easy for countries such as

Japan and South Korea. Meanwhile, on the sending side, countries like the Philippines

†Correspondence: Hal Hill, Arndt Corden Department of Economics, College of Asia and the

Pacific, The Australian National University,Canberra 2601, Australia. Email: hal.hill@anu.edu.au

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doi: 10.1111/aepr.12099 Asian Economic Policy Review (2015) 10, 223–224

© 2015 Japan Center for Economic Research 223