A rapidly aging population poses serious challenges for many countries around the world, particularly in Asia, home to the most populous countries. China and India account for nearly 36% of the world’s population, and are expected to face social and economic complications from demographic change in the next decades.

A special issue of the Journal of the Economics of Ageing explores these trends in a comparative perspective, “The Economic Implications of Population Ageing in China and India” (December 2014), co-edited by David Bloom, a professor at Harvard University’s School of Public Health, and Karen Eggleston, a Center Fellow at the Shorenstein Asia-Pacific Research Center.

“Population ageing represents uncharted waters for China and India,” Bloom and Eggleston write in their coauthored introduction.

The special issue is a collection of 10 articles that examine the economic benefits and potential dilemmas arising from decreased fertility and increased life expectancy, two trends that will impact the development and future trajectories of China and India at the micro- and macroeconomic levels.

Dropping or continued low birth rates imply fewer young people to refresh the labor market. But will this cause the workforce to shrink to an unsustainable level? Demand will increase for health care, long term care, and other social services that support the elderly. What must the government do to ensure adequate access to care?

Empirical data and commentary presented in the special issue seek to inform stakeholders about emerging patterns, and to provide insight on how to best address related policy challenges going forward.

“By adopting responsive behaviors and consultative institutions that address the challenges of population ageing in ways that are appropriate to their unique circumstances, China and India could reap the full economic and social benefits of longer, healthier lives,” they write.

The special issue includes an introduction by Bloom and Eggleston, a feature interview with Richard Suzman, and additional analysis by noted global health experts following each article. The titles and authors of the 10 original research articles are listed below:

• Intergenerational co-residence and schooling (Anjini Kochar)
• Regional disparities in adult height, educational attainment, and late-life cognition: Findings from the Longitudinal Aging Study in India (LASI) (Jinkook Lee, James P. Smith)
• Healthy aging in China (James P. Smith, John Strauss, Yaohui Zhao)
• Gender differences in cognition in China and reasons for change over time: Evidence from CHARLS (Xiaoyan Lei, James P. Smith, Xiaoting Sun, Yaohui Zhao)
• Reprint of: Health outcomes and socio-economic status among the mid-aged and elderly in China: Evidence from the CHARLS national baseline data (Xiaoyan Lei, Xiaoting Sun, John Strauss, Yaohui Zhao, Gonghuan Yang, Perry Hu, Yisong Hu, Xiangjun Yin)
• Should China introduce a social pension? (Bei Lu, Wenjiong He, John Piggott)
• China’s age of abundance: When might it run out? (Yong Cai, Feng Wang, Ding Li, Xiwei Wu, Ke Shen)
• The macroeconomic impact of non-communicable diseases in China and India: Estimates, projections, and comparisons (David E. Bloom, Elizabeth T. Cafiero-Fonseca, Mark E. McGovern, Klaus Prettner, Anderson Stanciole, Jonathan Weiss, Samuel Bakkila, Larry Rosenberg)
• Economic development and gender inequality in cognition: A comparison of China and India, and of SAGE and the HRS sister studies (David Weir, Margaret Lay, Kenneth Langa)
• Comparing the relationship between stature and later life health in six low and middle income countries (Mark E. McGovern)

The special issue of the Journal of the Economics of Ageing, vol. 4, pages 1-154 (December 2014) is available through Elsevier’s online platform ScienceDirect.

China’s State Council has put forth draft legislation that would ban smoking in public spaces, part of the government’s larger advocacy efforts to help curb tobacco use nationwide. Matthew Kohrman, a professor of anthropology at Stanford University, said it’s a step forward but the ban’s long-term success would depend on local enforcement.

Despite popular belief, global cigarette production has tripled worldwide since the 1960s. Leading the surge has been China.

“China has become the world’s cigarette superpower,” said Kohrman, in an interview on National Public Radio’s program, Marketplace.

Moreover, local governments in China have become dependent on tax revenues generated from tobacco sales, thus reinforcing the cigarette’s ubiquity and ease of access.

China has implemented smoking bans in the past, but with varied success. Now rising healthcare costs caused by tobacco-related diseases are creating urgency for new regulations.

“Whether or not these new regulations will be enforced will, in the end, come down to local politics,” he said.

Matthew Kohrman is part of the Asia Health Policy Program at the Shorenstein Asia-Pacific Research Center, and leads the project, Cigarette Citadels, a peer-sourced mapping project that compiles more than 480 cigarette factories globally.

The full audioclip is available on the Marketplace website.

Economic and demographic transition pose major challenges for countries worldwide, particularly in large developing countries like China; however, strengthening social welfare programs can offset negative effects and help promote a sustainable future, according to Karen Eggleston, a scholar of Asia health policy at Stanford University.

“Unprecedented economic growth in China spanning the last three decades has lifted hundreds of millions out of poverty and restored China to the prominence in the world economy that it once enjoyed centuries ago,” said Eggleston, who is a Center Fellow at the Walter H. Shorenstein Asia-Pacific Research Center.

“Demographic change not only shapes the trajectory of [its] development, but interacts with macroeconomic and microeconomic forces” in numerous ways.

Eggleston, who presented “China’s Demographic Change in Comparative Perspective: Implications for Labor Markets and Sustainable Development” at the Jackson Hole 2014 Economic Symposium “Re-evaluating Labor Market Dynamics,” says a combination of societal changes makes China distinctive, and that the country can offer insights in comparative perspective. She joined two other experts for a panel discussion on demographics during the three-day conference led by the Federal Reserve Bank of Kansas City, which draws dozens of central bankers, policymakers, academics, and economists from around the world.

The research stems from a project that Eggleston heads on policy responses to demographic change in Asia. The initiative, which is a part of the Asia Health Policy Program, grew out of a 2009 conference cosponsored by the Global Aging Program at the Stanford Center on Longevity. Its outcomes have included the publication, Aging Asia, a special issue of the Journal of the Economics of Aging focused on China and India co-edited with David Bloom of Harvard University, and two forthcoming books on urbanization and demographic change in Asia.

China in flux

China is the most populous country in the world with more than 1.3 billion people. Its sheer size alone creates heavy demands as demographics change, and the economy continues its shift from a centrally-planned system to a market-based system.

China’s population age 60 and older is projected to increase from one-tenth of the population in year 2000 to a staggering one-third by year 2060. Simultaneously, the population age 14 and under is projected to decrease by one-third between years 2010­ and 2055 (Figure 2).

Eggleston, and others who closely watch the situation, say these demographic changes will bring a myriad of challenges to the labor market and to cultural norms related to intergenerational support, work and retirement.

China’s low birth rates have largely been influenced by family planning campaigns that begun in the early 1970s, and later, the “one child policy,” a population control policy that allowed for the birth of only a single child in many families. Recently, the government has relaxed that policy, and analysts believe the change will eventually help to balance the population age structure and infuse the workforce with new employees, filling the void caused by retiring workers in the coming years.

In the meantime, preparing support structures for the older generations’ departure from the labor market is essential. Social welfare programs, including health insurance and retirement and childcare services, will see significant demand, and require restructuring to handle the influx.

China’s aging population experience is similar to other countries in Asia. Japan, South Korea and India are also projected to see significant increase in median age over the next 30 years (Figure 1). 

Eggleston says China has made positive steps toward restructuring its institutions, including establishing government-subsidized health insurance programs and reforming pension systems. Most notably since 2002, China took a large step towards universal health care by implementing the New Rural Cooperative Medical Scheme for rural residents. Now, nearly all citizens have access to basic medical care, which can support healthy aging as well as mitigate large “precautionary savings” and help those struck by medical conditions requiring significant services.

A pension system for people in China’s rural areas, developed by the government in 2009, also set up a supportive system by providing increased transfers for seniors, and, interestingly, supporting labor markets by easing the worries of adult children who migrate to urban areas for work.

China has been forward thinking with its related public policies, but it certainly can do more, Eggleston says. Integrating technology into its health systems, and making its services more fiscally responsible could improve efficiency, and expand access to care.

The full paper and handout from Eggleston’s presentation at the conference are available on the Federal Reserve of Kansas City website.

Paul Wise discusses the effects of the Affordable Care Act on children's health care.