adb - 为发展中的亚洲老年人需求提供资金：挑战与机遇Funding Developing Asias Old-Age Needs Challenges and Opportunities

FUNDINGDEVELOPINGASIA’SOLD-AGENEEDS

CHALLENGESANDOPPORTUNITIES

AndrewMason,DonghyunPark,andGemmaEstrada

NO.742

September2024

ADBECONOMICS

WORKINGPAPERSERIES

ASIANDEVELOPMENTBANK

ADBEconomicsWorkingPaperSeries

FundingDevelopingAsia’sOld-AgeNeeds:ChallengesandOpportunities

AndrewMason,DonghyunPark,andGemmaEstrada

No.742|September2024

TheADBEconomicsWorkingPaperSeries

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AndrewMason(amason@)isanemeritusprofessorofeconomicsattheUniversityofHawaii

atManoa.DonghyunPark(dpark@)isaneconomicadvisorandGemmaEstrada

(gestrada@)isasenioreconomicsofficer

attheEconomicResearchandDevelopmentImpactDepartment,AsianDevelopmentBank.

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ABSTRACT

ThepopulationofdevelopingAsia,inparticularEastAsia,isaging.Fundingtheneedsofitsgrowingpopulationofolderadultsisthebiggestsocioeconomicchallengethatagingpresentsfortheregion.Thecentralobjectiveofourpaperistoanalyzeempiricallyhowindividualsfundtheirold-ageneedsindifferenteconomies.whiledevelopingAsianeconomiesarethefocusofouranalysis,wealsopresentresultsforhigh-incomeeconomiesandnon-Asiandevelopingeconomiesforcomparativepurposes.ouranalysisreliesheavilyonwealthmeasuresbecausethesefacilitatecomparisonsofflowsoverthelifecycle,whichvarystronglywithage.ouranalysisindicatesthatdevelopingAsia'sold-agefundingneedswillrisesubstantiallybecauseofpopulationagingbetween2025and2065.wefindthatlaborincomewillplayasmallerroleinfundingtheregion'sold-ageneeds,whilepublicandprivatetransferswillplayalargerrole.whileexpandingpublictransferswillcontributetowardold-ageeconomicsecurity,theregionmustcarefullyplansuchexpansionandavoidunsustainablegenerositytosafeguardthemacroeconomicstabilitythatunderpinneditsrapideconomicgrowthanddevelopment.

JELcodes:J11,J14

I.INTRODUCTION

ThepopulationofdevelopingAsia,inparticularEastAsia,isaging.Fundingtheneedsofitsgrowingpopulationofolderadultsisthebiggestsocioeconomicchallengethatagingpresentsfortheregion.Thecentralobjectiveofourpaperistoanalyzeempiricallyhowindividualsfundtheirold-ageneedsindifferenteconomies.ouranalysisiscenteredondevelopingAsianeconomiesasthefocusofouranalysis,butwealsoanalyzehigh-incomeeconomiesandnon-Asiandevelopingeconomiestoprovidethebroadercontext.ouranalysisisbasedonwealthmeasures,whichfacilitatecomparisonsofflowsoverthelifecycle.Tocompareeconomiesofdifferentincomelevels,weusenormalizedvaluesthatrepresenteconomicvariablesasapercentageofcorelaborincome,i.e,averageannuallaborincomeofpersonsaged30-49yearsold.

wefindthatdevelopingAsia'sold-agefundingneedswillrisesubstantiallybecauseofpopulationagingbetween2025and2065.wefindthatlaborincomewillplayasmallerroleinfundingtheold-ageconsumptionneedsoftheregion'seconomies.Therelativeimportanceoflaborincomewilldecreaseby2%-4%.ontheotherhand,bothpublicandprivatetransferswillplayalargerrole.whileexpandingpublictransferswillcontributetowardold-ageeconomicsecurity,theregionmustcarefullyplansuchexpansionandavoidunsustainablegenerositytosafeguardthemacroeconomicstabilitythatunderpinneditsrapideconomicgrowthanddevelopment.

Inallcontemporaryeconomies,peopleconsumemoreatyoungandoldagesthantheyproducethroughtheirlabor.consequently,theyfacethechallengeofreallocatingresourcesacrossgenerationsoragegroupsinwaysthatarebothequitableandefficient.Failuretodosocanleadtounderinvestmentinhumancapital,slowereconomicgrowth,andhighratesofchildpoverty,or,conversely,childrearingcoststhatarehighenoughtosharplyreducethebirthrate.standardsoflivingforseniorsmayfallbehindthatofyoungergenerationsor,conversely,highspendingontheneedsofolderadultsmayrequireunduesacrificesonthepartofworkingageadultsandchildren.

Theseissueswillbecomeincreasinglysalientasdemographicchangeleadstoconsiderablepressureonthesystemsthatarecurrentlyemployedtoreallocateresources.Astheeffectsofthecoronavirusdisease(COVID-19)recede,lifeexpectancyisexpectedtoriseeverywhere.Insomelow-incomeeconomies,declinesininfantandchildmortalityareexpectedtoleadtoanincreaseinthenumberofchildren.Inmosteconomies,however,thegainsinmortalitywillbeconcentratedatolderages.Aspeoplelivelonger,theywillfacetheprospectofoutlivingtheirresources.Theywillhavenochoicebuttoadjusttheirresourcereallocationstrategies.

Althoughpeoplearelivinglonger,populationgrowthisdeclining,andpopulationsareagingbecauseoflowfertility.Thisdemographicchangewillaffectthereallocationsystemsbyinfluencingthetermsoftradeacrossgenerations.Theeffectisimportantinthecaseofintergenerationaltransfers,whicharegovernedbyan"ironrule."Thecostofproviding

intergenerationaltransfersvariesindirectproportiontothenumberreceivingsupportrelativetothenumberprovidingsupport.Inthefaceofaging,thecosttoproviderswillriseasthenumberofseniorsriserelativetothenumberofproviders.Thisprincipleappliesequallytopublicandprivatetransfersystems.

Reallocationsarealsorealizedthroughlifecyclesaving.working-agepeopleaccumulateassetstofundtheirold-ageneeds.Theimpactofdemographicchangeoninterestrates-thetermsoftradethatgovernasset-basedreallocationacrossgenerations-isthesubjectofconsiderablediscussion.slowerpopulationgrowthcanlowerinterestrates,withsignificantimplicationsforold-agereallocations.

Theemphasisofthispaperisonreallocationstoseniors.Threeimportantquestionsareconsidered.Thefirstsectiondiscussesold-ageneedsandtheold-agesupportsystemsformeetingthem.second,howwillcontinuedgainsinlongevitystrainthosesupportsystems?Third,howwilldemographicchangeanddecisionsaboutsupportsystemsaffectsustainablestandardsofliving?Aninnovativefeatureoftheanalysisisthatitallowsfordifferentsupportsystemsforchildrenandseniors.

II.SOMEBASICPRINCIPLES

Theanalysisemployedherereliesheavilyonwealthmeasuresbecausethesefacilitatecomparisonsofflowsoverthelifecycle,whichvarystronglywithage.Thisapproachmakesitpossibletocomparethevaluesofnetinflowsthatoccurrelativelyearlyinlifewiththosethatoccurmuchlaterinlife.wealthmeasuresalsoallowassessmentoftheeconomicimpactofchangesinsurvivalthatoccuratvariousages.

wealthalsodependsoninterestratesaboutwhichthereisanextensiveliterature,ifgolden-rulegrowthholdsadeclineintherateofpopulationgrowthyieldsanequaldeclineininterestrates(phelps1961).otherstudies(Hansen1939,EggertssonandMehrotra2014,summers2014,carvalhoetal.2016)haveconcludedthatslowerpopulationgrowthwillleadtolowerinterestrates.Manystudiesdonotagreewiththisconclusion(piketty2014).weallowforthesediversefindingsbyrelyingontwoscenarios.Inonecase,theinterestrateisheldconstantwhile,inthealternativescenario,aonepercentagepointdifferenceinthepopulationgrowthrateisassumedtoyieldaonepercentagepointdifferenceintheinterestrate.

ASiswellknown,therateofreturntointergenerationaltransfersisequaltotherateofpopulationgrowthplusproductivitygrowth,therateofgrossdomesticproduct(GDP)growthinsteady-state.Thereasoninghereissimple.Byparticipatinginatransfersystem,oneearnsinterestifthenumberofprovidersisgrowingand/ortheresourcesperprovideraregrowing.TheresourcesthatareavailablefortransfersincreaseattherateofGDpgrowth(samuelson1958).IfgoldenrulegrowthholdsthatrateofinterestandGDpgrowthwillbeequal,moretypicallytherateofreturntocapital(ortheinterestrate)exceedsGDpgrowth.Iftherateof

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returntocapitalorinterestrateexceedstherateofGDpgrowth,asset-basedreallocationsyieldahigherrateofreturnthantransfersystemsifthereallocationsareinanupwarddirection.Thisisthecaseforold-agereallocations.Fordownwardreallocations,duringthechildrearingphase,transfersystemsofferanadvantagebecausethecostoftransferdebtislowerthancostofcapital.otherconsiderationsaside,sustainableconsumptionishighestwhendownwardreallocationsarefundedviatransfersandupwardreallocationsrelyingonasset-basedreallocations.

Tocompareeconomiesatverydifferentlevelsofdevelopment,werelyonnormalizedvaluesthatrepresenteconomicvariablesasapercentageofcorelaborincome.Bycorelaborincome,wemeantheaverageannuallaborincomeofpersonsaged30-49yearsold.Thisagegrouphasbeenselectedtoexcludetheeffectsofimportantendogenousfeaturesofthelifecycle,suchastheagesatwhichanindividualleavesschool,entersthelaborforce,andretires.

ThemainobjectiveofthisstudyistoanalyzemembereconomiesoftheAsianDevelopmentBank,butresultsarepresentedalsoforotherdevelopinganddevelopedeconomiesinordertoprovidecontext.

withfewexceptions,individualsfaceanundeniablerealityastheygrowolder-theircurrentconsumptionwillexceedandcontinuetoexceedtheirlaborincomefortheremainderoftheirlives.sustainingtheirstandardoflivingwillrequireresourcesotherthanlaborincome.Theageatwhichlaborincomebecomesinsufficientvariesfromindividualtoindividualandsystematicallyacrosseconomies,butinmosteconomies,currentlaborincomedropsbelowcurrentconsumptionataroundage60.

Thewealthrequiredtofundold-ageneeds,calledlifecyclewealth(LCD),dependsbroadlyonthreefactors:(i)theanticipatedconsumptionandlaborincomeateachage,(i)thenumberofyearsbeforedeath,and(ithediscountrate.Theanalysispresentedinthefirstpartofthepaperisbasedonstrongassumptionsabouteachofthefollowingfactors:(i)thecurrentpercapitaageprofilesofconsumptionandlaborincomeshiftupwardataconstantrateofproductivitygrowthassumedtobe1.5%peryear,(i)individualsaccumulatewealthbasedoncurrentsurvivalrates(yaari1965),and(ii)futureflowsaresubjecttoa6%discountrate.Theestimatesgiventheseassumptionsyieldanaiveassessmentoftheimpactofagingthatisbasedonthebeliefthatage-specificsupportwillnotdeclineasaconsequenceofaging,

LCDatage60oemploystheseassumptionandageprofilesofconsumptionandlaborincome

for69economiesforarecentyeardrawnfromNationalTransferAccounts(LeeandMason201,unitedNationspopulationDivision2013).Anadditional117economiesforwhichageprofileshavebeenestimated(Mason,Lee,etal.2017)bringthetotalto186economies.Thesurvivalratesforeacheconomyarebasedon2021estimatesdrawnfromworldpopulation

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prospects(unitedNationspopulationDivision2022).Tofacilitatecomparisonacrossvaryinglevelsofincome,allvaluesexpressedrelativetotheaveragecorelaborincome,laborincomeofpersonsaged30-49yearsold.

consumptionwealthisthewealthrequired,relativetoannualcorelaborincome,bythoseofage6oin2021.Laborwealthisthesyntheticcohortvalueoflaborincomeofthose6o,againmeasuredrelativetocorelaborincome.

Figure1:consumptionwealthandLaborIncomewealthofpersonsAged6oasapercentageofcoreLaborIncome,classifiedbyIncomeGroupoftheEconomy,2021

source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

consumptionwealthvariesfromalowof7timesannualcorelaborincometoahighof21timesannualcorelaborincome(Figure1).consumptionwealthishighestinhigh-incomeeconomiesbecausepeoplesurvivetoanolderageandbecausetheirpercapitaconsumptionishighand,insomecases,risingwithage.consumptionwealthishighestinJapan,whichexceeds21timescorelaborincome.consumptionwealthislowestinlow-incomeeconomies,whichrarelyexceeds1timescorelaborincome.Middle-incomeeconomiesfallbetweenthetwoextremes,withconsumptionwealthconcentratedat9-12timescorelaborincome.

old-agelaborwealthvariesfromone-timecorelaborincometoahighofseventimescorelaborincome.Thegreatmajorityofeconomiesfallinthe1.5-4.0range.High-incomeeconomiestendtohavelowerlaborwealth,relativetotheircorelaborincome,thanother

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economiesbecauselaborincomedropssharplyatrelativelyyoungagesinmanyhigh-incomeeconomies.Theagepatternoflaborincomeismoreimportantthanthepositiveimpactonlaborwealthofhighlongevityinhigh-incomeeconomies.Theunitedstatesstandsoutasanexceptiontothispatternformajorhigh-incomeeconomies.Itslaborincomewealthexceeds6timescorelaborincomecomparedwith2.8timesfortheaverageEuropeaneconomy.Laborwealthishigherinmostlow-andmiddle-incomeeconomiescomparedwithhigh-incomeeconomies.Inahighpercentageoftheseeconomies,laborincomewealthrangesfromthreetofourtimescorelaborincome.

Becauseconsumptionwealthtendstobehighandlaborincomewealthlowinhigh-incomeeconomies,itisunsurprisingthatlaborisfundingarelativelysmallshareofold-ageconsumption(Figure2).Inmosthigh-incomeeconomies,laborisfundinglessthan25%ofconsumption.Inlow-incomeandmiddle-incomeeconomies,laborincomeusuallyfundsmorethan25%and,often,theshareexceeds30%ofconsumption.Inthegreatmajorityofeconomies,irrespectiveoftheleveloftheirincome,laborfundslessthanhalfoftheconsumptionofseniors.

Figure2:LaborwealthasapercentageofconsumptionwealthatAge6o,classifiedbyIncomestatusoftheEconomy,2021

source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

Thedistributionsofconsumptionandlaborwealthatage6oaresimilarforAsiaandpacificeconomiesandfortheworldasawhole(Figure3).consumptionwealthskewshigherfor

5

high-incomeeconomies,whilethepatternsforlower-anduppermiddle-incomeeconomiesaresimilartooneanother.consumptionwealthislowrelativetocorelaborincomeintheonly

oflaborwealthinAsiaisaclusterofuppermiddle-incomeeconomies(kazakhstan,Tonga,andTurkmenistan)withhighlaborwealth.

Figure3:consumptionwealthandLaborIncomewealthofpersonsAged6o

asapercentageofcoreLaborIncome,classifiedbyIncomestatusoftheEconomy,2021

Note:ThedataoneacheconomyisinAppendixTableA1.

source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

ThedistributionoflaborwealthasapercentageofconsumptionwealthinAsiaandthepacificisalsosimilartotheworldasawhole(Figure4).Theshareoflaborwealthislowinhigh-incomeeconomiesandhigherinlow-andlowermiddle-incomeeconomies.Again,theclusterconsistingofkazakhstan,Tonga,andTurkmenistanstandsoutwithahighshareoflaborwealthcomparedwithotheruppermiddle-incomeeconomies.

Figure4:LaborwealthasapercentageofconsumptionwealthatAge6o,classifiedbyIncomestatusoftheEconomy,2021

Note:ThedataoneacheconomyisinAppendixTableA2.

source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

Normalizedconsumptionandlaborwealthcanalsobeinterpretedastheeffectiveyearsoflifeofconsumersandworkers.AverageexpectedvaluesofdiscountedyearslivedandnormalizedconsumptionandlaborincomebyincomegroupsarereportedinTable1.Foralleconomiescombined,discountedlifeexpectancyatage6ois12.2years,14.3yearsinhigh-incomeeconomies,and10.4yearsinlow-incomeeconomies.Averagenormalizedconsumptionisslightlyhigherthanexpectedyearslivedforalleconomiescombined,significantlyhigherinhigh-incomeeconomiesandlowerthanyearslivedinlow-incomeeconomies.

Table1:ExpectedDiscountedyearsofLifeatAge6o(L6o);

consumptionwealth(c6o);andLaborwealthyI6o)atAge6o,2021

L6OC6OYI6O

Alleconomies12.212.63.6

High-incomeeconomies14.316.53.0

upper-middle-incomeeconomies12.112.03.7

Lower-middle-incomeeconomies11.210.93.9

LOW-incomeeconomies10.49.13.8

source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

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Laborwealthisequalto3.6timescorelaborincomeforalleconomiescombined.Laborwealthinhigh-incomeeconomiesislowerbyabout15%comparedwithalleconomieseventhoughyearslivedisgreaterby17%.Longerlifeisnotbeingtranslatedintogreaterlaborwealthforseniors.Laborwealthforotherincomegroupsvarieslittle,rangingfrom3.7to3.9years.Note,however,thatasapercentageofexpectedyearslived,laborwealthislowerinmiddle-incomeeconomiesthaninlower-incomeeconomies.

ThedevelopingeconomiesofAsiaaresimilar,butalsodistinctivecomparedtothoseofothereconomiesintheworld.Expecteddiscountedyearslivedafterage6oarehighestinEastAsiaat14.0yearsandlowestincentralAsiaandthepacificat11.4years(Table2).consumptionwealthatage6orangesfrom13.3timescorelaborincomeinEastAsiato10.5timesincentralAsia.Thehighestvalues,foundinEastAsia,aresubstantiallybelowthevaluesfoundinhigh-incomeeconomieseventhoughlifeexpectancyissimilar.ThisdifferenceisexplainedinpartbecauseconsumptiondoesnotincreasesharplywithageexceptinJapan.IfJapanisincluded,thevaluerisesto14.6.

Table2:ExpectedDiscountedyearsofLifeatAge6o(L6o);consumptionwealth(c6o);andLaborwealth(YI60)atAge6oasapercentageofcoreLaborIncome

L6OC6OYI6O

centralAsia11.410.53.8southAsia11.912.13.4southeastAsia12.311.93.3EastAsia14.013.32.7Thepacific11.411.03.6

Note:Developingmembereconomiesonly.valuesaresimpleaveragesofvaluesformembereconomies.source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

ExpectedlaborwealthisrelativelylowinAsia.InsouthAsiaandsoutheastAsia,laborwealthfallsshortof3.5timescorelaborincome.InEastAsia,laborwealthisonly2.7,10%belowthevaluefoundforhigh-incomeeconomies.Laborwealthatolderagesisparticularlylowinthepeople'sRepublicofchina(PRC)at1.5timescorelaborincome.Inonlytwonon-Asianeconomies,kenyaandslovenia,islaborwealthsolowatolderages.

consumptionandlaborwealthatage6odependontheanticipatedageprofilesofconsumptionandlaborincome,age-specificsurvivalratesforthoseoverage6o,andtherateofinterest.Towardtheendofthispaper,weconsiderchangesinallofthesefactors,buthereweconsiderasimplerquestion:Giventheinterestrateandnormalizedageprofilesof

consumptionandlaborincome,howwilllongerlifeaffectconsumptionwealth,laborwealth,

andthedifferencebetweenthetwoLCD.

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projectedvaluesfor2022,2025,and206oarereportedinTable3,butthevaluesin2022arenotemphasizedbecausetheyareinfluencedbytheshort-termeffectsofthecovID-19epidemic.Thesizeoftheprojectedchangesvariesfromeconomytoeconomyandforgroupsofthoseeconomies,dependingonhowmuchlifeexpectancyincreases,theagesatwhichthoseincreasesareconcentrated,andtheageprofilesofconsumptionandlaborincome.TheinfluenceofthesefactorsisevidentinTable3,whichshowsprojectedconsumptionandlaborwealthbyincomegroup.Theincreaseforconsumptionwealthishighinhigh-incomeeconomiesbecausegainsinsurvivalareconcentratedatolderageswherepercapitaconsumptiontendstoberelativelyhigh.verysimilarratesofgrowthareprojectedformiddle-incomeeconomiesaswell.Thegrowthratesforlow-incomeeconomieslagato.15%perannumbecausepercapitaconsumptionatolderagestendstoberelativelylowintheseeconomies.

uppermiddle

Table3:projectedconsumptionandLaborwealthatAge6o,IncomeGroups,2022,2025,and206o

consumptionwealth

Growth

Laborwealth

Growth

2022

2025

Rate(%)

2022

2025

Rate(%

Highincome

4.7

4.7

4.8

income

5.3

Lowermiddle

income

5.2

5.4

LOWincome

Note:IncomegroupsfromworldBank(2021).valuesaresimpleaveragesofvaluesfor186economies.Growthratesarefor2025-2060.

source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

Gainsinlongevityhavemuchsmallereffectsonlaborwealththanonconsumption.Thisisparticularlytrueofhigh-incomeeconomieswheretheannualgrowthrateoflaborwealthisonlyo.06%peryear.Theincreasebetween2025and206obarelyregistersato.1timescorelaborincome.Thisoutcomefollowsfromtheconcentrationofimprovedsurvivalfallingatageswherelaborincomeisverylow.

Laborwealthforuppermiddle-incomeeconomiesandlowermiddle-incomeeconomiesisprojectedtobeabouttwiceasfastasprojectedforhigh-incomeeconomies.However,theprojectedgrowthratesfortheseeconomiesarestillmuchslowerforlaborwealththanconsumptionwealth.Asomewhatinterestingfindingisthatprojectedlaborwealthisgrowingsoslowlyinlow-incomeeconomies.

Table4:projectedconsumptionandLaborwealthatAge6o,2022,2025,206o

consumptionwealthLaborwealth

20222025

GrowthRate(%

20222025

Growth

centralAsia10.911.415.50.275.05.15.4o.12

southAsia12.412.814.30.314.94.95.2o.12

southeastAsia12.412.713.90.254.54.54.7o.11

EastAsia13.513.815.10.273.93.94.00.09

Thepacific11.311.412.50.274.84.85.0o.12

Note:valuesaresimpleaveragesofvaluesformembereconomies.Growthratesarefor2025-2060.source:Authors'calculationsbasedondatafromtheNationalTransferAccounts.

TheprojectedvaluesofconsumptionandlaborincomefortheAsiandevelopingeconomiesexhibitpatternsthataresimilartothevaluesforuppermiddle-incomeandlowermiddle-incomeeconomiesfortheworld(Table4).Thegrowthratesofprojectedconsumptionwealthareaboutone-quarterofapercentperyear,alittlefasterforsouthAsia.Thegrowthratesoflaborwealthareo.1%oro.12%peryear,exceptinEastAsia.Thebottomlineisthatlaborwealthisgrowingbecausepeoplearelivinglonger,butconsumptionwealthisgrowingabouttwiceasfastor,inthecaseofEastAsia,threetimesasfastwhencomparedwithlaborwealth.

Intheabsenceofchangesinagepatternsofconsumptionandlaborincome,thecominggainsinlife