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Preparing for the Challenges of Population Aging in Asia: Strengthening the Scientific Basis of Policy Development III http://www.nap.edu/catalog/12977.html the Changing DeMograPhY of asia P rojections indicate that the percentage of those aged 65 and older will more than triple between 2000 and 2050 in China, india, and indonesia and more than double in Japan (see figure 1), as the result of two long-term trends. the first is the steady increase in life expectancy that has been going on for at least 60 years and is expected to continue for the foreseeable future (see figure 2). With improvements in nutrition, public health, and medical care, more and more people are living into their 70s, 80s, and even older. the second long-term trend is the steady decline in fertility rates (see figure 3) (that is, the average number of children that a woman can be expected to bear during her reproductive years), which is associated with among other things increasing standards of living, decreasing childhood mortality, and successful family planning programs. these two trends, taken together, will ultimately cause dependency ratios to rise (see Box 1). one notable characteristic of the aging populations is the difference in longevity by gender. in 2005, life expectancy was 2.4 years longer for women than men in india, 3.2 years longer for women in China, 3.8 years longer for women in indonesia, and 7.4 years longer for women in Japan. By 2050, the gender gap is projected to increase to 3.9 years in China, 4 years in india, 4.4 years in indonesia, and 7.5 years in Japan.4 fIgURe 1: PeRCeNTAge of PoPUlATIoN  ANd oVeR, 10-00 40% China India 35% Indonesia 30% Japan 25% 20% 15% 10% 5% 0% 1950 1975 2000 2025 2050 sourCe: Data from united nations (2008). World Population Prospects: The 2008 Revision. new York: united nations Department of economic and social affairs, Population Division. 10 PreParing for the Challenges of PoPulation aging in asia Copyright © National Academy of Sciences. All rights reserved.

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Preparing for the Challenges of Population Aging in Asia: Strengthening the Scientific Basis of Policy Development http://www.nap.edu/catalog/12977.html fIgURe : ChANgINg lIfe exPeCTANCIeS, 10-00 100 China 90 India Indones ia 80 Japan 70 60 50 40 30 20 10 0 1950-1955 1955-1960 1960-1965 1965-1970 1970-1975 1975-1980 1980-1985 1985-1990 1990-1995 1995-2000 2000-2005 2005-2010 2010-2015 2015-2020 2020-2025 2025-2030 2030-2035 2035-2040 2040-2045 2045-2050 sourCe: Data from united nations (2008). World Population Prospects: The 2008 Revision. new York: united nations Department of economic and social affairs, Population Division. fIgURe : ChANgINg feRTIlITy RATeS, 10-00 7 China India 6 Indones ia Japan 5 4 3 2 1 0 1950-1955 1955-1960 1960-1965 1965-1970 1970-1975 1975-1980 1980-1985 1985-1990 1990-1995 1995-2000 2000-2005 2005-2010 2010-2015 2015-2020 2020-2025 2025-2030 2030-2035 2035-2040 2040-2045 2045-2050 sourCe: Data from united nations (2008). World Population Prospects: The 2008 Revision. new York: united nations Department of economic and social affairs, Population Division. 11 PreParing for the Challenges of PoPulation aging in asia Copyright © National Academy of Sciences. All rights reserved.

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Preparing for the Challenges of Population Aging in Asia: Strengthening the Scientific Basis of Policy Development http://www.nap.edu/catalog/12977.html DepenDency Ratios Box 1: The dependency ratio is the ratio of the number of people who are either younger than 15 or older than 64 to the number of people aged between 15 and 64; it is used to approximate the average number of dependents supported by each person of working age. The dependency ratio of a country with an aging population follows a characteristic pattern over time (see Figure 4). Initially, as the number of children per working-age adult decreases, the dependency ratio also decreases. If a country has appropriate social, political, and economic institutions, this change can lead to realization of a “demographic divi- dend”—a significant boost to a country’s economic growth and development because there are relatively more workers FIGURE 4: dePeNdeNCy RATIoS foR foUR CoUNTRIeS, 10-00. ChINA 1.20 Overall dependency ratio 1.00 Ratio of y oung dependents (age 0-14) to work ing age population (age 15-64) 0.80 Ratio of elderly dependent s (age 65+) to work ing age 0.60 population (age 15-64) 0.40 0.20 0.00 50 60 70 80 90 00 10 20 30 40 50 19 19 19 19 19 20 20 20 20 20 20 INdIA 1.20 Overal l dependency ratio 1.00 Ratio of young dependent s (age 0-14) t o work ing age populat ion (age 15-64) 0.80 Ratio of el derly dependents (age 65+) t o work ing age 0.60 populat ion (age 15-64) 0.40 0.20 0.00 0 0 0 0 0 0 0 0 0 0 50 5 6 7 8 9 0 1 2 3 4 19 19 19 19 19 20 20 20 20 20 20 1 PreParing for the Challenges of PoPulation aging in asia Copyright © National Academy of Sciences. All rights reserved.

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Preparing for the Challenges of Population Aging in Asia: Strengthening the Scientific Basis of Policy Development http://www.nap.edu/catalog/12977.html in the population who spend less of their income on dependents and thereby generate more savings, investment, and output per capita.5 over time, however, the effects of increasing life expectancy come to predominate, and the depen- dency ratio rises again. This can be a period of economic stress if appropriate policies have not been put into place.6 Dependency ratios in Asia all follow this general pattern, although the timing varies among countries. The dependency ratios in India and Indonesia will not reach their lowest levels until 2040 and 2025, respectively. In China, however, the dependency ratio will start rising after 2010, while in Japan the dependency ratio has been climbing upward since the 1990s. one practical implication of this timing is that Indonesia and India will have the chance to observe the ways that Japan and China deal with their own aging populations and learn from the successes and failures of those efforts. INdoNeSIA 1.20 Overal l dependency ratio 1.00 Ratio of young dependent s (age 0-14) t o work ing age population (age 15-64) 0.80 Ratio of el derly dependents (age 65+) t o work ing age population (age 15-64) 0.60 0.40 0.20 0.00 50 60 70 80 90 00 10 20 30 40 50 19 19 19 19 19 20 20 20 20 20 20 JAPAN 1.20 Overall dependenc y ratio 1.00 Ratio of elderly dependents (age 65+) to work ing age population (age 15-64) 0.80 Ratio of y oung dependents (age 0-14) to work ing age 0.60 population (age 15-64) 0.40 0.20 0.00 50 60 70 80 90 00 10 20 30 40 50 19 19 19 19 19 20 20 20 20 20 20 sourCe: Data from World Population Prospects: The 2008 Revision. new York: united nations Department of economic and social affairs, Population Division. 1 PreParing for the Challenges of PoPulation aging in asia Copyright © National Academy of Sciences. All rights reserved.