SEOUL, March 4 (UPI) — The aging population in South Korea could stimulate new growth for the economy, a state-run economic think tank said Sunday.
South Korea is one of the most rapidly aging countries in the world, with more than 40 percent of the population expected to be over age 65 in 2060, up from 12.8 percent in 2015, according to Statistics Korea.
This, coupled with a chronically low birthrate and stagnant job market, has raised concerns about the future of the country’s economic productivity and prospects for the dwindling younger generation who will have to bear escalating social costs to support the elderly population.
A structural reform could be the solution, according to the Korea Institute for Industrial Economics and Trade.
Its report said that baby boomers, born between 1955 and 1963, could become a sturdy consumer base for high value-added services and products developed for elderly people.
There are currently about 7 million South Korean baby boomers who tend to be much more educated and interested in personal development as well as maintaining their youth than the generations before them, Newsis reported.
The KIET report suggested the post-baby boom generation is also likely to invest in specialized goods and services as they are more individualistic and tend to consume more.
The new industry could create more jobs for young people as well as stimulate domestic consumption.
However, with nearly half of Korea’s elderly population over the age of 65 living under poverty, measures are needed to boost their disposable income, according to the report.
“The government must play the leading role in supporting the development of new services and the creation of the market for elderly-friendly services until it fully takes off,” said Cho Hyun-seung, director of service industry policy at KIET.