Growing old the hard way: China, Russia, India

Policy Review

Volumn , Issue 136, 2006, Pages 15-39

  Eberstadt, Nicholas ^a  

^a AMERICAN ENTERPRISE INSTITUTE   (United States)

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EID: 33645963772     PISSN: 01465945     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Review

References (51)

1. A select representation might include: Alan J. Auerbach, Laurence J. Kotlikoff and Robert Hageman, "The Dynamics of an Aging Population: The Case of Four OECD Countries," NBER Working Papers 1797 (1989);
2. David Cutler et al., "An Aging Society: Opportunity or Challenge?" Brookings Papers on Economic Activity 1 (1990), 1-56;
3. Richard Disney, Can We Afford To Grow Older? A Perspective on the Economics of Aging (MIX Press, 1996);
4. OECD, Maintaining Prosperity in an Ageing Society (Paris: OECD, 1998);
5. United Nations Population Division, Replacement Migration: Is It a Solution to Declining and Ageing Populations? (UN Department of Economic and Social Affairs, March 2000);
6. Peter S. Heller, Who Will Pay?: Coping with Aging Societies, Climate Change and Other Long-Term Fiscal Challenges, (IMF, 2003);
7. Landis MacKellar et al., The Economic Impacts of Population Ageing in Japan, (Elgar, 2004);
8. James Proterba, "The Impact of Population Aging on Financial Markets," NBER Working Papers 10851 (2004);
9. International Monetary Fund, World Economic Outlook: The Global Demographic Transition (IMF, September 2004).
10. More popularized presentations include Peter G. Peterson, Gray Dawn: How the Coming Age Wave Will Transform America -and the World (Times Books, 1999);
11. Robert Stowe England, Global Aging and Financial Markets: Hard Landings Ahead? (CSIS Press, 2002);
12. Philip Longman, The Empty Cradle: How Falling Birth Rates Threaten World Prosperity and What To Do About It, (Basic Books, 2004);
13. and Laurence J. Kotlikoff and Scott Burns, The Coming Generational Storm: What You Need To Know About America's Economic Future (MIT Press, 2004).
14. Demographers today generally use global population projections by the United Nations Population Division and the United States Census Bureau as their reference standards: UNPD'S "World Population Prospects" are available electronically at http://www.unpopulation.org;
15. USCB'S "International Data Base" can be accessed at http://www.census.gov/ipc/www. Either set of projections (UNPD "medium variant" or USCB sole-variant) can be used to support the calculations above.
16. An illustrative example will emphasize the point. In a high-mortality society where female life expectancy stayed at 50 years and births per lifetime forever averaged six per woman, median age would eventually stabilize at about 16 years. On the other hand, if female life expectancy were 50 but births per lifetime averaged two instead of six, median age would stabilize close to 40! With an average of two children and a female life expectancy of only 50, in fact, the 65-plus group would ultimately account for over 15 percent of total population - a higher fraction than that estimated for the "more developed regions" at the dawn of the twenty-first century. (Estimates derived for "stable population" structures with female life expectancy of 50 under either West, North, East, or South "model" life tables - cf. Ansley J. Coale and Paul Demeny with Barbara Vaughan, Regional Model Life Tables and Stable Populations (Academic Press, 1983) and USCB International Data Base.)
17. Chris Wilson and Gilles Pison, "La majorité de l'humanité vit dans un pays où la fécondité est basse," Population & Sociétés 405 (October 2004).
18. Technically, Eastern Europe is defined as "more developed" rather than "less developed" in the UN'S global taxonomy. Because these "more developed" countries are nonetheless relatively low-income societies, we will include them for consideration here. 6 The task of reaching today's OECD per capita income levels, incidentally, may be even more daunting than those numbers suggest, for China, Russia and India all enjoy extremely generous PPP adjustments in this table, each of which scales up the country's actual exchange-rate-based per capita output level by a factor of four or more. By actual exchange-rate-based per capita GDP estimates, Russia's is one-fifteenth of Western Europe's, and China's is less than a twentieth of Japan's. 7 The UNPD currently suggests that China's total fertility rate was about 1.91 in 1990-95, a level roughly 16 percent below that required for long-term population replacement, and that China's TFR has subsequently declined to a bit over 1.7 today. The U.S. Census Bureau's reading is quite similar: For 2005, it projects a TFR of 1.71 for China. These estimates, of course, are prepared under uncertainties, the most important of these being the lack of complete annual vital registration data for China, and the unknown degree of under-reporting of infants and children in the country's censuses and demographic surveys. For background, see Daniel Goodkind, "China's missing children: The 2000 census underreporting surprise," Population Studies 58:3 (2004), 281-295,
19. and Guangyu Zhang and Zhonwei Zhao, "China's Fertility Puzzle: Data Collection and Data Use in the Last Two Decades," paper presented at Population Association of America 2005 Annual Meeting, Philadelphia, Pennsylvania (April 1, 2005).
20. For background, see World Bank, Old Age Security: Pension Reform in China (World Bank, 1997);
21. Song Xiaowu, ed., Perfect the Pension System (Enterprise Management Publishing House, 2001) [in Chinese];
22. Jinxing Huang, "Economic Restructuring, Social Safety-Net and Old-Age Pension Reform in China," American Asian Review 21:2 (2003),
23. and Xin Wang, "China's Pension Reform and Capital Market Development," China & World Economy 12:3 (2004).
24. Professor Mark W. Frazier of Lawrence University may have pinpointed a critical factor in this continuing delay: "Until the fundamental question of what the state owes its citizens in terms of guaranteed basic pension benefits is resolved, the debate over the necessity of pension legislation to supplant the current patchwork of national and local regulatory controls is largely academic." "What's in a Law?: China's Pension Reform and its Discontents," in Neil J. Diamant, Stanley J. Lubman, and Kevin J. O'Brien, Engaging the Law in China: State, Society and Possibilities for Justice (Stanford University Press, 2005), 108-130, cite at 125.
25. Data drawn from China Ministry of Labor and Social Security, China Labour Statistical Yearbook 2003, Tables 1-43, 1-51,
26. and China National Bureau of Statistics, Tabulation on the 2000 Population Census of the People's Republic of China, Volume 2, Tables 4-4, 4-4c.
27. Yasuhiko Saito, Xiaochun Qiao and Sutthichai Jitapunkul, "Health Expectancy in Asian Countries,"
28. in J.M. Robine et al., Determining Health Expectancies (Chichesten England: John Wiley & Sons, 2003), 289-317.
29. How are we to explain modern Russia's awful health tragedy? The fact is, demographers and public health specialists do not fully understand the reasons for these gruesome results. Diet, smoking, sedentary lifestyles, and health care (or the lack of it) all play their part. Russia's romance with the vodka bottle is also deeply implicated here. Part of the mystery of the ongoing Russian health disaster, however, is that the problem looks to be worse than the sum of its parts: that is to say, death rates are significantly higher than one would predict on the basis of observed risk factors alone.
30. Available at http://www.mortality.org.
31. Those Census Bureau projections, furthermore, do not formally take into account the possibility that additional and perhaps severe new health setbacks may lie in store for the Russian Federation. Yet precisely such problems are, quite plainly, on the horizon today: Think of the country's still-gathering HIV/AIDS and drug-resistant tuberculosis epidemics.
32. A single example: In 1999 - by no means the worst year for health in post-Communist Russia - the same death rates experienced by 40-year-old Russians were matched in Italy by women at age 55 and by men at age 60, respectively. (Estimates from the Human Mortality Database, www.mortality.org.)
33. Given Russia's grim health problems, it may seem paradoxical that the population should be aging so rapidly. Remember, however, our earlier discussion: Population aging is driven much more by fertility patterns than mortality - and Russia's fertility levels today are far below replacement.
34. For a penetrating overview and analysis of the Russian pension situation, see Leon Aron, "Privatizing Pensions," AEI Russian Outlook (Summer 2004).
35. See, for example, Christophe Z. Guilmoto and S. Irudaya Rajan, "District Level Estimates of Fertility from India's 2001 Census," Economic and Political Weekly (February 16, 2002), data from Table A-I.
36. For a more comprehensive treatment, see Christophe Z. Guilmoto and S. Irudaya Rajan, eds., Fertility Transition in South India (Sage Publications, 2005).
37. P.N. Mari Bhat, "Demographic Scenario, 2025, Study #8-15, Research Projects on India - 2025 conducted by Centre for Policy Research (New Delhi, July, 1003).
38. Tim Dyson, "India's Population - The Future," in Tim Dyson, Robert Cassen and Leela Visaria, eds., Twenty-First Century India: Population, Economy, Human Development, and the Environment (Oxford University Press, 2004), 74-107. Professor Dyson also generously shared with me some of the additional unpublished details from this same series of projections.
39. Derived from World Bank, World Development Indicators 2004 CD-ROM. Estimates for Western Europe are for the 12 current countries of the European Monetary Union for 1960-65; estimates for Japan are for 1960.
40. For background, see First Report of Project OASIS (Old Age Social and Income Security), India Ministry of Social Justice and Empowerment (February 1, 1999);
41. World Bank, India: "The Challenge of Old Age Insurance Security," Report 22034-IN (April 5, 2001);
42. B.C. Purohil, "Policymaking for diversity among the aged in India," Journal of Aging and Social Policy 15:4 (2003);
43. and Robert Palacios, "The Challenge of Pension Reform in India," in Edgaro M. Favaro and Ashok K. Lahiri, Fiscal Policies and Sustainable Growth In India (Oxford University Press, 2004), 282-300.
44. Anne Goujon and Kirsty McNay, "Projecting the educational composition of the population of India: selected state-level perspectives," Applied Population and Policy 1:1 (2003). The discussion below benefits from additional unpublished projections from that effort, kindly transmitted to me by Dr. Goujon. The discussion refers to the Goujon-McNay "Scenario One" projections.
45. Robert J. Barro and Jong-Wha Lee, International Data on Educational Attainment: Updates and Implications, Harvard University Center for International Development Working Papers 42 (April 2000).
46. For example: Ansley J. Coale and E.M. Hoover, Population Growth and Economic Development in Low-Income Countries (Princeton University Press, 1958);
47. Stephen Enke, "The economic aspects of slowing population growth," Economic Journal 76 (1966);
48. David Bloom and Jeffrey Williamson, "Demographic Transitions and Economic Miracles in Emerging Asia," World Bank Economic Review 12 (1998), 419-456;
49. David Bloom, David Canning, and Jose Sevilla, The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change (Rand, 2003).
50. Comparisons derived from World Bank, World Development Indicators (2004) CD-ROM.
51. Mari Bhat, "Demographic Scenario, 2025," 9.