The fast-shifting demographic landscape of East Asia's top economies is a slow-moving crisis, one analyst said at a talk hosted by U.S. think tank the Asia Society Policy Institute last week.
Others said the economic and social impact of the trends in South Korea and its developed neighbors, driven by plummeting birthrates and aging workforces, could be offset if governments tackle the root issues and embrace labor-saving solutions.
East Asia's Declining Birth Rates
South Korea's fertility rate is the lowest in the world at 0.72 births expected per woman during her lifetime, despite over $200 billion in government funding in the past 16 years on initiatives to encourage child-rearing. Neighboring China (1.0), Japan (1.2) and Taiwan (0.85) also rank near the bottom of fertility rate tables.
A fertility rate of 2.1 is considered necessary to replace a population.
The Looming Labor Shortage
Two decades from now, "you're going to see (South Korea's) population of the working age side drop by about 10 and a half million people," Troy Stangarone, director of the Hyundai Motor-Korea Foundation Center for Korean History and Public Policy at Wilson Center, said citing South Korean government statistics. "So that's roughly one-third of the workforce will leave the workforce over the next two decades."
This shrinking labor force "is going to pull down South Korea's potential growth rate," he said.
Stangarone cited statistics from the inter-governmental Organisation for Economic Co-operation and Development as projecting that given current trends the country's GDP, which grew by 1.3 percent in 2023, could see growth rates as low as 0 percent by 2050.
Economic Malaise and Global Impact
Stangarone characterized the demographic situation in East Asia as "not a crisis today. It's a crisis over a long period of time."
National Security Implications
Another realm likely to be impacted is national security. Decades-long tensions along its heavily militarized border with North Korea means Seoul boasts one of the world's largest militaries.
Stangarone pointed out that South Korea strives to maintain an active duty force of about 500,000. Yet "in about 10 years, there just simply won't be enough young males to take and maintain an army of that size," he observed. "And that then has implications for how do you take and deal with different potential conflict situations."
Taiwan and Japan, which are stepping up defense efforts amid the rising security threat from China, will also see their military ranks affected.
The Role of Technology in Super-Aged Societies
Andrew Oros, professor of Political Science and International Studies at Washington College, pointed to the society-changing role technology could play in preparing super-aged societies for the future.
"We see that the most advanced militaries of the world are doing more and more through automation and using technology to place labor, which has nothing to do with demographic trends," Oros said.
Cooperation between advanced militaries like Japan's and friendly countries in the region with growing populations, such as the Philippines and Japan's fellow QUAD member India, could see partners' strengths complement each other.
The Drivers of Low Fertility Rates
The rising housing and living costs in cities and changing cultural attitudes among younger generations are major drivers behind the region's falling fertility rates, which are highly correlated with marriage in the region.
A 2023 survey by South Korea's Ministry of Gender Equality and Family published in May showed 38.5 percent of 13-24 year olds saw marriage as necessary, a drop of 12.5 points since 2017. Meanwhile, six in 10 between the ages of 13 and 24 said they did not feel it necessary to have children even if they get married.
Jennifer Sciubba, president and CEO of the nonprofit statistics firm Population Reference Bureau, stressed the decision to have a child can involve "a long, complicated list" of pros and cons.
She said cash bonuses and maternity leave are often insufficient in the region to make a difference.
"I think in all of these societies, including here in the U.S., women are being asked to have more babies, work more, and take care of older people," she said. "Everyone needs to get together and realize that a policy in one area could actually affect a policy in another area."
The Future of East Asia
The East Asian demographic crisis presents a complex set of challenges that require innovative solutions. Governments must address the rising costs of living, support for working families, and changing cultural attitudes towards marriage and child-rearing. Technological advancements in automation and robotics could also play a crucial role in mitigating the economic impact of the aging population.
The future of East Asia will be shaped by how effectively its governments and societies adapt to this demographic shift. The implications extend beyond the region, as the global economy and power dynamics are likely to be significantly impacted by the changing face of East Asia.
