South Korea at the Forefront of the Global Aging Crisis


 
Due to a fast-falling fertility rate over recent decades, South Korea is facing a shrinking working-age population. So far, Government intervention to raise the fertility rate has proven ineffective. Alongside this, with already the second highest life expectancy in the OECD, there is a decreasing number of taxpayers able to support the ever-growing number of dependent retirees. As can be seen in the chart below, where in 1950 there were nearly 20 workers supporting each retiree, it is projected, by 2050, there will only be 1.3.

Number of Workers to each Dependent (65+) in South Korea
The working-age population represents those aged 15 to 64. Period: 1950-2050.
South Korea at the Forefront of the Global Aging Crisis




The projection charted above estimates South Korea’s worker-to-dependent ratio to be the lowest out of any OECD country by 2050. Without drastic Government intervention, such as increasing the retirement age, South Korea’s working-age population will continue to shrink, and the cost for each taxpayer is likely to continue to rise. This is because retirees cost Governments the most out of any age demographic due to expensive medical and care provisions. In 2020, for example, South Korean retirees (aged 60+) represented 23.7% of the total population, but constituted half of total healthcare expenditure.

The declining number of taxpayers available to support the rising number of expensive-to-maintain, non-working retirees will mean the tax burden on the working population of South Korea could soon become overwhelming. With the lowest projected worker-to-dependent ratio in the OECD by 2050, South Korea is at the forefront of this costly demographic crisis.

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