January 29, 2009: Dr. Nicholas Eberstadt

(Click to Enlarge) Nicholas Eberstadt describes demographic changes in Northeast Asia

Demographic Trends in Northeast Asia: The Shape of Things to Come

(Washington D.C.) January 29– Northeast Asia will experience large demographic changes in the next twenty years that will have implications for the economics, politics, and culture of regional countries. In an East-West Center in Washington Asia Pacific Security Seminar, Nicholas Eberstadt, Henry Wendt Chair in Political Economy at the American Enterprise Institute, discussed the demographic challenges facing China, Russia, Japan, and South Korea.


In the 1970s when demographers discussed Asia, they talked about large population growth, but the Asian population explosion is long over. Northeast Asian demographers are now concerned with current and projected population declines as Japan, Russia, China, and South Korean women produce fewer children than is required for population replacement. Declines in population have been seen in Russia since the end of communism, while the population is just beginning to decline in Japan. South Korea will experience this trend in the next decade, with China following soon after. These declines will be coupled with a corresponding decrease in the population of working-age individuals and an increase in the percentage of elderly. These demographic changes have long-term impacts on each nation and the region, particularly from an economic standpoint.


China will soon experience a large increase in the number of people over the age of 65, as will South Korea and Japan. Unlike its neighbors, however, Dr. Eberstadt pointed out that the average Chinese citizen has a much lower income than a Japanese or South Korean, and China’s pension and medical insurance systems cover a very small percentage of the population. The elderly used to depend on their sons for support in their old age, but it is predicted that one third of Chinese women will have no sons by the year 2030. According to Dr. Eberstadt, China must begin considering how to support the elderly, and must also consider how the decrease of the working-age population will impact industry and the phenomenal economic growth rates that China has enjoyed.


Dr. Eberstadt explained that Russia is facing a much more serious challenge than Japan, China, or South Korea. Where the other countries’ population declines are the result of falling birthrates, Russia’s population decline is caused by the number of deaths outweighing the number of births. For the last four decades, the life expectancy of the average Russian has steadily declined, leading to an abnormal situation where a father can expect to live longer than his eldest son, who can expect to live longer than his younger brother. Far from correcting itself, Dr. Eberstadt believes that this abnormal situation has become normal in Russia, and that longevity can be expected to continue to decline for the next few decades.


Japan’s population has only recently begun to decline, but there is already a concern in Japan about the decrease of the labor force and the aging of the Japanese population. Unlike lower-income China, however, Dr. Eberstadt is not particularly worried about the economic impact of this demographic change on Japan. The Japanese are considered some of the healthiest people on earth and can expect to age healthily. This means that it is likely that elderly Japanese will be able to participate in the workforce at higher rates than can be expected in other countries, minimizing the economic impact. It is possible, Dr. Eberstadt explained, that Japan’s GDP could continue to rise despite a decrease in the traditional working age population.


South Korea can expect similar decreases in the working age population as well as a graying population in the next decade. A more pressing demographic problem for South Korea, also shared by China, is an abnormal boy to girl birth ratio brought about by various artificial measures utilized to satisfy a son preference among parents. Though Dr. Eberstadt pointed out that this abnormal birth ratio is falling back to normal in South Korea, there will soon be a shortage of young women of marriageable age in both South Korea and China. A shortage of brides could lead to frustrated young men, which in turn can lead to social unrest. Additionally, though unlikely in the short term, South Korea should also consider the possible impact that reunification with North Korea might have on its population. Though good data on North Korea’s population is difficult to come by, Dr. Eberstadt noted that there is almost certainly a huge gap in human capital between the North and the South, most especially in predictions of life expectancy. Unification would have serious demographic and economic impacts on the Korean Peninsula.


All of these demographic changes will have profound implications for Northeast Asia, as each country will have to plan for the support of an aging population, the maintenance of an economy with fewer workers, and the promotion of the health and fertility of its population. Dr. Eberstadt explained that the lessons learned by these countries as they undertake these tasks will be closely watched by developed nations in other parts of the world that may soon face similar demographic challenges.


Nicholas Eberstadt holds the Henry Wendt Chair in Political Economy at the American Enterprise Institute and is also a senior adviser to the National Bureau of Asian Research in Seattle. He serves on the advisory board of the Korea Economic Institute of America and is a founding member of the U.S. Committee for Human Rights in North Korea. Dr. Eberstadt is currently, inter alia, a member of the President’s Council on Bioethics and the Visiting Committee for the Harvard School of Public Health. He is regularly consulted by governmental and international organizations, including the U.S. Census Bureau, U.S. State Department, U.S. Agency for International Development, and the World Bank. Dr. Eberstadt’s books and monographs include The End of North Korea (AEI Press, 1999); The North Korean Economy: Between Crisis and Catastrophe (Transaction, 2007); Europe’s Coming Demographic Challenge: Unlocking the Value of Health (AEI Press, 2007); and most recently, The Poverty of ‘The Poverty Rate’: Measure and Mismeasure of Want in Modern America (AEI Press, 2008).