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Research Interests

Demographics (HC)

■ Demographics​

Human capital (HC) is the strongest impact of the capital city relocation in Indonesia based on system dynamics simulation. Although the new big city with adequate infrastructure is constructed while destroying the natural rainforest, the impacts of produced capital (PC) and natural capital (NC) were relatively smaller than that of HC. In the study, there are four factors to improve HC: (i) improvement of health conditions due to the mitigation of air pollution caused by traffic congestion, (ii) improvement education standards in the new capital city area, and (iii) job creations in the construction sector.

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■ Aging​

Population aging is a serious problem currently the world confronts. This new global issue will have many unprecedented impacts on broad fields, such as macroeconomics, social security, and sovereign debt management. For example:

  • slowdown of economic growth (Chen et al. 2016; Acemoglu and Restrepo 2017; Aksoy et al. 2019),

  • less productivity (Feyrer 2007, 2008, 2011),

  • demand shirking (Vargha et al. 2017),

  • decrease in tax revenue of governments (Razin et al. 2002),

  • risk of pension system (Heijdra and Romp 2009),

  • increase in medical cost (Zeng and Hesketh 2016), and

  • risk of health care and medical system (Flaherty et al. 2007).

 

    The retirement of the second baby boomers will make the situation worse over the next two decades. Historically, improvements in economic standards have accelerated the speed of aging. For example, the percentage of the population aged 65+ rose from 7% to 14% for shorter periods in recent emerging countries (South Korea, Singapore, Taiwan, and Hong Kong) compared with those in developed countries. The other countries are also expected to confront faster speed in aging. This evidence implies that aging is inevitable for all nations of the world sooner or later (WPP: World Population prospects).

    Japan is the most aged country in the world. In Japan, the aging ratio (65+ to total population) became the highest in the world in 2005, and it is projected to remain at the top until at least 2065 (WPP). The aging ratio was 26.6% in 2015 and will reach 37.7% in 2050. The total national population reached its peak at 128 million people in 2008 during the study period. The trend of the total population in Japan is expected to curve almost symmetrically over the 100 years before and after 2000. Although the total fertility rate has recovered from the lowest level of 1.26 in 2005, Japan will continue confront many challenges, such as a lack of labor power and an increased cost of social welfare along with a decreased number of workers. Even Tokyo, where total population still increases, has been facing a serious aging situation. 

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■ References​

  • Acemoglu, D., & Restrepo, P. (2017). Secular stagnation? The effect of aging on economic growth in the age of automation. American Economic Review, 107(5), 174–179. https://doi.org/10.1257/aer.p20171101

  • Aksoy, Y., Basso, H. S., Smith, R. P., & Grasl, T. (2019). Demographic Structure and Macroeconomic Trends. Behavioral and Brain Sciences, 11(1), 193–222.

  • Chen, J., Wang, Y., Wen, J., Fang, F., & Song, M. (2016). The influences of aging population and economic growth on Chinese rural poverty. Journal of Rural Studies, 47, 665–676. https://doi.org/10.1016/j.jrurstud.2015.11.002

  • Feyrer, J. (2007). Demographics and productivity. Review of Economics and Statistics, 89(1), 100–109. https://doi.org/10.1162/rest.89.1.100

  • Feyrer, J. (2008). Aggregate Evidence on the Link between Age Structure and Productivity. Population and Development Review, 34, 78–99.

  • Feyrer, J. (2011). The US productivity slowdown, the baby boom, and management quality. Journal of Population Economics, 24(1), 267–284. https://doi.org/10.1007/s00148-009-0294-z

  • Flaherty, J. H., Liu, M. L., Ding, L., Dong, B., Ding, Q., Li, X., & Xiao, S. (2007). China: The aging giant. Journal of the American Geriatrics Society, 55(8), 1295–1300. https://doi.org/10.1111/j.1532-5415.2007.01273.x

  • Heijdra, B. J., & Romp, W. E. (2009). Retirement, pensions, and ageing. Journal of Public Economics, 93(3–4), 586–604. https://doi.org/10.1016/j.jpubeco.2008.10.009

  • Razin, A., Sadka, E., & Swagel, P. (2002). The aging population and the size of the welfare state. Journal of Political Economy, 110(4), 900–918. https://doi.org/10.1086/340780

  • Vargha, L., Gál, R. I., & Crosby-Nagy, M. O. (2017). Household production and consumption over the life cycle: National time transfer accounts in 14 European countries. Demographic Research, 36(1), 905–944. https://doi.org/10.4054/DemRes.2017.36.32

  • Zeng, Y., & Hesketh, T. (2016). The effects of China’s universal two-child policy. The Lancet, 388, 1930–1938. https://doi.org/10.1016/S0140-6736(16)31405-2

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