Geoscience Reference
In-Depth Information
Table 11.3
Impacts of population aging on value added, government revenues and labor supply
(unit: %)
Government
revenue
GDP
GRP of SMA
GRP of ROK
Labor supply
2006
0.21
0.14
0.26
0.19
0.24
2007
0.43
0.45
0.42
0.38
0.56
0.65
0.64
0.66
0.57
0.85
2008
2009
0.95
0.96
0.94
0.81
1.24
2010
1.22
1.23
1.21
1.01
1.56
2011
1.43
1.50
1.38
1.16
1.77
2012
1.71
1.89
1.57
1.36
2.12
2013
1.81
1.96
1.68
1.39
2.12
2014
2.14
2.40
1.94
1.65
2.69
2015
2.40
2.79
2.09
1.83
3.20
2016
2.73
3.20
2.35
2.08
3.92
2017
3.11
3.69
2.64
2.40
4.82
2018
3.31
4.11
2.66
2.56
5.44
2019
3.75
4.62
3.04
3.01
6.43
2020
4.84
5.72
4.13
4.35
7.33
Average
2.37
2.78
2.04
1.98
3.01
SMA
Seoul metropolitan area,
ROK
Rest of Korea
How can these economic losses be compensated for in the long run? A few
policy options have been proposed, e.g., securing new labor forces such as retirees,
immigrants, and female workers through incentive tools and improving the techno-
logical skills through education and training programs. This paper focuses on
investment policies concerning the university education of the 2020s groups to
cope with the labor supply shortage created by the population aging. Seven
alternatives for the investment simulation are set up depending on the annual
growth rates of the educational investment expenditures from 0 % to 12 % com-
pared with the baseline (see Table
11.4
where the results for selected years are
shown). The increase in the education investments with the annual growth rate of
3 % could result in the GDP decreasing by
1.92 %, which is higher than the case
without the investment (0 %) by 0.45 % point. Even though the investment growth
rate is expanded to 11 % for 15 years, the GDP would not be larger than the result of
the baseline with the population aging. Finally, the simulation with the annual
growth rate of 12 % could lead to the GDP increasing by 0.26 % on the 15-year
average, offsetting the negative economic effects caused by the population aging in
Korea. Under this scenario, the government is required to increase the expenditure
by 12 % every year for at least 11 years to generate a net growth of the GDP in the
sense that the GDP growth rate increases from
0.34 % in the 11th period (2016) to
0.15 % in the 12th period (2017).
Contrary to traditional intuition, the results in Table
11.4
show that the increase
in the educational investment expenditures would not reduce GDP losses caused by
