Study: 1.4 Younger People Will Support One Senior Citizen in 2050

A repot has shown that in 2000, 10 productive people supported one senior, but in 2050, 1.4 productive population will support each elderly person.

According to a report titled “The influence the aging population has on the economy” released on July 14 and based on data from the Ministry of Finance and Economy, the Organization for Economic Development and Cooperation (OECD), and the International Monetary Fund (IMF), Korea’s ratio of productive population to seniors will be 69.4 percent, 10 percent higher than in 2000.

The ratio resulted from dividing the amount of population over 64 by those aged between 20 and 64. If the ratio goes up, younger people (the productive population’s) burden of supporting senior citizens becomes heavier.

In 2000, five people supported one senior on average in OECD member states, but in 2050, two people are forecast to support one. In 2050, three people will support one elderly in the United States, two for one in Britain and 1.4 for one in Japan.

Compared to 2000, Korea will become the country where the ratio of seniors in need of support grows at the fastest speed among OECD countries until 2050.

OECD forecast that Korea will have a fiscal deficit equivalent of 7.7 percent of GDP in 2050 due to the increase in senior-related spending.

The Ministry of Finance and Economy worries that if Korea’s society ages too fast, the welfare budget will increase, imposing more of a burden on the people and dampening investment and growth.

Experts advised that various financial products should be developed to prevent the productive population from stopping spending money and only saving it in order to provide for their old age, and that investment should be encouraged by enhancing the soundness of the asset management industry.

legman@donga.com