Population Ageing and Saving Rates in China,Japan and Korea: A Panel Granger Causality Analysis

Abstract

The world is ageing fast and East Asia is not an exception. Among the three major East Asian countries, Japan features the eldest society in the world, while China and Korea also witness a dramatic demographic transformation. One important impact of population ageing is on saving rates. In this paper we seek to investigate the causal relationship between demographics and savings in those three countries by employing a panel of data-set and innovative econometric technique – panel Granger causality test. On balance there is evidence supporting the argument that a growing younger population causes an increase in national saving, albeit not necessarily in household saving. The results are robust against different estimation procedures and parameters.     

Financial intermediation and economic growth in Southern Africa

Using various indicators of financial development, this paperinvestigates the role of financial intermediation in stimulatingeconomic growth in Southern Africa. The results lend some supportto the hypothesis that financial development is positively correlatedwith the growth rate of real per capita GDP. This relationshipis more evident in regressions that use pooled data (5-yearcross-sections) than those using annual data. This finding suggeststhat the finance-growth nexus is a long-run phenomenon. Thedata indicate that while Botswana and Mauritius are catchingup with South Africa towards a high-income steady state, therest of the countries are stagnating to low income levels andlow growth rates.     

Employers' Responses to Demographic Changes in Rural Labour Markets: The Case of Dumfries and Galloway

Employers in many rural areas are facing the problem of a declining workforce due to demographic changes in the population. These demographic changes are a result of a combination of population ageing, the in-migration of mainly retired people, out-migration and low fertility rates. This paper examines how employers are adjusting to demographic changes in Dumfries and Galloway, a rural local authority in south west Scotland. The area has one of the highest proportions of older people in the UK, and as such provides a useful insight into employers' responses to population ageing. Fifty locally based employers were questioned concerning the labour market impact of population ageing and their responses to this situation. The paper argues that in order to ensure the medium-term economic viability of the local economy, employers will need a set of strategies both to attract workers to the area and to increase the participation and retention of older workers resident in the area.     

Economic Convergence in the African Continent: Closing the Gap

The paper attempts to analyse the conditional β‐convergence and its sources for 32 African countries over the period 1960‐2008. The augmented Solow model with both gross domestic product (GDP) per worker and per capita income is estimated using the dynamic system generalized methods of moments (GMM) technique with the panel data. This is the first study on the sources of conditional β‐convergence for African countries. According to the results of the augmented Solow model, income convergence rates are lower than those of GDP per worker. Moreover, total factor productivity convergence, human capital convergence and capital labour convergence are contributing towards the convergence of GDP per worker in Africa. This means that growth in the poorest African countries is being augmented by “catch‐up factor,” which is good news for them. However, convergence in terms of GDP per worker is not being fully translated into income per capita convergence. The demographic structure in the African continent with its record of persistent population growth has played an important role in lowering the income convergence of its countries.     

Old Age and Poverty in Developing Countries: New Policy Challenges

Almost all developing countries are now experiencing demographic ageing. This paper examines the consequences of ageing for the poor. It assesses the extent to which the poor are participating in demographic ageing, or whether the process is largely restricted to relatively privileged groups. The paper observes that policy and research mainly focus on pensions programs, which have little relevance for most poor older people. It then describes livelihood patterns for poor elders, highlighting the importance of intergenerational exchange. Health policies are also found to largely ignore the needs of this group, and the expansion of private financing presents particular problems.     

Designing an Alternative Public Pension Scheme: A Korean Case Study

The trends of ageing population and slow economic growth have become a major concern for public pension schemes with the defined benefit (DB) type. To mitigate the impact of this trend and secure long-term financial sustainability, several countries have recently adopted notional defined contribution (NDC) schemes. In this paper, we show how to apply an NDC scheme to the public pension system of Korea, arguably the fastest ageing country. In particular, we create a new pension system by combining the current Korean pension scheme and an NDC. Through simulations it is shown that the proposed scheme can reduce the financial instability caused by the changes in demographic and economic factors, while retaining the income redistribution component. We further consider applying a German-type automatic balancing mechanism to the proposed scheme, by using the average income to determine the return rate of the fund, to make it sustainable in the long term.     

Macroeconomic implications of population aging: Evidence from Japan

Population aging is an important feature of Japan’s economy, which since 2006 has become a super-aged society. Changes in the age distribution of the population have important macroeconomic implications. Using annual data for 1960–2015, this study tests whether population age shares have long run influences on domestic saving, domestic investment, real GDP, inflation, the fiscal balance, and the current account balance. Cointegration is found between each macroeconomic variable and the demographic variables, which is a key finding of the analysis. The main empirical findings from the long-run cointegrating equations are that the effects of demographic change on the macroeconomic variables are statistically significant and quite strong. Alternative variants of the United Nation’s population projections provide further evidence of the importance of the demographic changes for Japan’s macroeconomic future. This study finds that future trends of key macroeconomic variables are not monotonic, but rather that long swings in the demographic factors produce a mixture of moderate growth periods and episodes of GDP stagnation.     

Demographic destiny, per-capita consumption and the Japanese saving-investment balance

In this paper, we revisit the issue of the impact of demographicchange on the Japanese saving investment balance. Using updatedgovernment projections, we show that the ageing of the populationunder way will steadily lower Japan's saving rate from 31 percent of GDP today to 20 per cent of GDP in 2040. Japan's investmentrate will remain close to its current level of 29 per cent.Thus, Japan's saving investment balance, or current account,will steadily decrease from its current level and will turnnegative in 2025. In addition, we project the impact of demographicchange on the evolution of Japanese consumption per capita,or 'living standards'. Despite the population ageing, we projectthat per-capita consumption will grow until 2010. However, undercertain scenarios, consumption per capita falls in most yearsafter 2010.     

European Patterns of Development in Historical Perspective

Abstract

Europe provides a suitable scenario for testing empirical regularities of growth since, to a large extent, its countries share institutions, policies, and resource endowments. Patterns of development, which associate structural change with variations in GDP per head and population, are constructed for modern Europe (1850–1990) along the lines of Chenery and Syrquin's pathbreaking work. Thus, it is possible to discern whether a common set of development processes is observable for the whole continent and whether countries that had a late start exhibited, as suggested by Gerschenkron, a differential behaviour in terms of accumulation, resource allocation, and demographic transition. The results tend to confirm the different nature of latecomers’ development.     

Current Account Deficit in Mauritius: Risks and Prospects

Mauritius is often cited by international institutions, including the International Monetary Fund and World Bank, as a success story in economic development. The island has, since the early 1970s, adopted an export‐led growth strategy to power its economy. However, a constant decline over the last decade in the exports to gross domestic product (GDP) ratio has resulted in a worsening current account to GDP ratio, which is now a cause for concern. Using a three‐regime, self‐exciting threshold autoregressive (SETAR) model, this paper finds that the Mauritian economy may converge to either of two current account equilibria, namely a deficit of 9% or a surplus of 2.5% on a seasonally adjusted basis. A dynamic simulation exercise suggests that the Mauritian current account is more likely to switch from surplus to deficit equilibrium than from deficit to surplus equilibrium. Given that the prevailing deficit is in the vicinity of the deficit equilibrium, structural policies aiming to boost productivity and efficiency are indispensable for pulling Mauritius out of the “deficit trap,” the more so since the island has been experiencing a continuous erosion of trade preferences, which formerly enabled it to have privileged access for its exports to the EU market.     

Costs and potential funding of expanded public pension coverage in Asia

Public pension burdens in most emerging Asian economies are still relatively small. However, there are a number of reasons to believe that they will increase markedly in the coming years. First, many Asian economies will face rapidly ageing populations, which will raise pension and other old‐age‐related spending dramatically. Second, as economies develop, political pressures to expand the coverage of public pensions and raise pension benefits will likely increase. The first objective of this paper is to identify the potential fiscal burden of public pensions in 23 emerging Asian economies, based on econometric models and forecasts of GDP and demographic trends. Using two different methodologies yields estimated increases in the average share of public pension expenditures in GDP of 1.0 percentage point and 3.6 percentage points by 2030 compared with current levels. We believe the latter estimate is more realistic. The second objective is to recommend policies to provide adequate funding for public pension needs, including enhancing the efficiency of social insurance programs, improving the balance of revenues and expenditures, implementing more explicit fiscal rules and frameworks, and establishing stronger fiscal surveillance at the national and regional levels.     

我国农村养老保障体系发展的困境与对策

我国已经步入老龄化社会,而作为一个农业大国,农村人口的老龄化现象比城市更加突出。但是,与城市比较健全的社会养老保障制度相比,我国农村养老保障体系存在着较多的问题和困境。文章分析了我国农村养老保障体制的现状,并提出了对策,认为国家应该承担起其在完善农村养老保障制度中的责任。     

Population Growth and Economic Growth: Long-Run Evidence from Latin America

Unit root tests, the Johansen maximal likelihood methodology, and Granger causality tests in the context of a one-step error correction model are used to examine the long-run relation between population and per capita GDP in seven Latin American countries over most of the 20th century. The results suggest that no long-run relation has existed and, hence, population growth neither causes per capita GDP growth nor is caused by it.     

Assessment of Demographic and Socioeconomic Losses due to Premature Mortality in the Populations of Russia and Vologda Oblast

The article has estimated the demographic and socioeconomic losses due to premature mortality from the primary classes of causes of death in the population of Russia and Vologda oblast. The eliminated reserves of mortality and years of potential life lost have been calculated to analyze the demographic damage. The per capita GDP and GRP data is involved in assessing the economic damage due to premature mortality in the population. It has been established that the most demographic and socioeconomic damage is endured due to the circulatory system diseases, external causes of death, and neoplasms. The patterns of losses from premature mortality displayed significant gender- and age-specific distinctions.     

Are Manufacturing Exports the Key to Economic Success in Africa?

The poor performance of many African economies has been associatedwith low growth of exports in general and of manufacturing exportsin particular. The two most successful countries in Africa havebeen Botswana and Mauritius. In Botswana, rapid export growthfollowed the discovery of diamonds; in Mauritius, manufacturingexports played a major role. In this paper we draw on both macroand micro evidence from nine African countries to investigatewhether manufacturing exports are the key to success in Africa.We do this by posing three questions. First, how close is thelink between export and income growth? Second, is there evidencefrom these African countries that manufactured exports haveled to greater economic success? Third, what has limited thesuccess of firms in the manufacturing sector? We argue thatexport and income growth are very closely linked. However, thereis, for this sample of countries, no evidence that if theirexports are manufactures, growth rates are higher. We show thatthe factors that limit the success of African manufacturingfirms in exporting are their levels of efficiency and smallsize. We argue that the key to success in an area where Africahas a potential cost advantage — labour-intensive garments— is to enable large firms to use a more labour-intensivetechnology than is the case at present.     

Serbia on the path to modern economic growth

Given the scanty and inadequate studies on Serbia's growth performance before the First World War, this paper presents production-side GDP estimates for Serbia for six years between 1867 and 1910. It probes into the growth dynamics, assessing convergence with the more developed countries of north-western Europe, as well as progress towards achieving modern economic growth. Although the economy showed some dynamism in terms of overall GDP, per capita GDP in pre-First World War Serbia grew by only 0.28 per cent per annum, as much of the overall GDP growth was eroded by rapid population growth. Far from converging with north-western Europe, Serbia continued to fall behind. Sluggish structural transformation and slow income per capita growth suggest that Serbia's transition to modern economic growth was in its infancy. Growth in the dominant agricultural sector was extensive, driven by expanding arable land and population growth. Land was affordable and easy to obtain; hence, peasants invested little in new technologies. Meanwhile, the modern industrial and service sectors were below a threshold that could sustain rapid growth. Nevertheless, this study also highlights the rapid expansion of a small modern sector and export diversification that reflected emergent ‘green shoots’ in 1905–10.     

重庆市人口老龄化特征及成因分析

通过对重庆市统计数据的分析,重庆市人口老龄化特征有以下几点：老年人口规模加速扩大;未富先老特征明显;老年型人口年龄结构进一步加强;城乡老龄化倒置严重;人口机会窗口已经开启;老年人口性别比严重失衡等.究其原因,主要是计划生育、预期寿命延长、年龄组死亡比差异与年青人口流动与迁移等因素.     

Age structure of the population in Belgium and social security

The effects of demographic aging and of various socioeconomic factors on the social security system in Belgium are explored. "Special attention is given to the impact of the ageing of the population on the pension problem. Based on a simple formula a series of percentages of taxation have been calculated as a function of shifts in the proportion of retired vs. active population and in the proportion of the average income vs. the average amount of pension. One of the conclusions is that the progressive ageing of the population will become the most significant factor in the growth of social expenditures."     

不同的老龄化,不同的发展模式

从人口老龄化到社会老龄化美国用71年,中国仅用21年。美国养老基金2010年达到18.89万亿美元,占全球总量的63%,是其GDP的120%;中国养老基金加总额为1.5万亿元人民币,是美国养老基金的1.27%。美国的养老基金从中国经济增长中得到了实惠;而中国养老基金由于空账运行、缺乏市场运作,没有分享到经济发展的成果。中国亟待创造条件让更多国民拥有财产性收入,特别是养老基金;应提高公民的养老金教育和管理能力,政府治理养老金市场的能力。     

Smallness and islandness

This paper examines the question whether small islands, as distinct from small countries, are a useful category in analytical, predictive or policy terms. A comparison of Mauritius and Swaziland is used to illustrate possible elements of insularity. It is concluded that islands are not a useful category in the context of social analysis and policy, and that the attempt to use them in this way is an illegitimate extension of biological to social categories of thinking.