edited by Kyungsoo Choi, Hyungpyo Moon, Inseok Shin, Chin Hee Hahn

Chapter I. Introduction: What are the Issues in Aging?

This report is the output of the first year’s research in the “Economic Impacts of Population Aging in Korea and Directions for Policy Responses” project which is KDI’s national project during 2003~2004.
Korea’s population is aging very rapidly compared with other countries’ past experiences. Such a rapid aging is a result of Korea’s belated industrialization and fast economic growth thereafter. Aging brings about economic impacts, and conceptually they can be classified in two categories—one is the impact caused by population aging itself, and the other is impact that stems from inadequateness of institutions as burdens are put on the system by the population aging. According to foreign countries’ experiences the latter are even more important. As such, responses for aging require institutional reforms. However reforms of institutions that involve interests of a wide range of people are never easy, and in no country the reforms were achieved early enough. Here lies the seriousness of rapid population aging in Korea, that is, the time for reforms are not sufficient, and also the urgency of research on population aging, that is, we need to set the direction for reform early enough.
Also, the economic impact differs among countries since different countries have different socio-economic institutions. They need to be evaluated if the policy directions are to be determined. The economic impacts of aging in Korea would not be the same as in other countries, and the objective of research in the first year has been to identify the issues and seek answers to the questions raised by such issue. Most researchers took empirical approaches as the issues required quantitative evaluation.
Chapter I surveys and identifies the issues in aging in the Korean context in the fields of labor, public finance, financial market, and macro economy. Some of those issues are addressed in corresponding Chapters, and those not covered will be left for the second year’s research agenda.

Chapter II. Analysis on Population Aging

In chapter II, “Analysis on Population Aging in Korea” (by Kyungsoo Choi) introduces prospect of population aging in Korea, analyzes the low fertility trend, and reviews the effects of policy on fertility in foreign countries. The prospect of Korea’s rapid population aging is the major result in the recent long-term population projection of KNSO (Korea National Statistical Office) published in 2001. The projection reveals that Korea will join the aged societies—defined as countries with the ratio of population aged 65 and over to total population above 14%—in 2019, 19 years after she became an aging society with the ratio above 7% in 2000. Further, it is predicted that Korea will become a super-aged society in 2026 with the ratio above 20%. Such a pace of aging is much quicker compared with the advanced countries’ past aging experiences, where the transition took several decades.
The paper begins with the issue of how we should view the rapid population aging in Korea. An international comparison reveals that the historical pattern of population aging and income growth in Korea is very similar with those in advanced countries except that they happened much earlier in those countries. From the commonality of trends and patterns, he infers that Korea’s rapid population aging is a result of her belated industrialization and rapid economic growth thereafter.
Korea’s rapid aging is a result of the low fertility trend consistent since the mid-1980s. Hence, in the short- to mid-term, the progress of aging will not be much affected by the future fertility. But an analysis of the low fertility trend is necessary not only to determine policy directions for fertility in face of its recent further drop but also to evaluate robustness of the long-term population projection.
Korea’s total fertility rate is currently lower than those in most advanced countries, standing at 1.30 in 2001 and 1.17 in 2002. The fertility drop is accompanied by rising marriage and childbearing ages, but estimated cohort completed fertility rate is also dropping. Hence, fertility drop in Korea is not only a result of deferred childbirth timing but also a result of reduction in number of children demanded. An explanation on Korea’s low fertility needs to answer both the belated timing and the reduced childbirth in life by Korean women.
Economic theory suggests that if the demand for quality of children rises, that is, if investment in children increases, the demand for number of children may decrease although expenditure for children rises as income grows. And demand for quality rises if human capital investment becomes more productive or women’s time cost becomes more important. In Korea, households’ expenditures in education have been increasing, and the share of college-educated mothers, who tend to spend more on their children’s education, is rising fast. The most frequent responses for reasons of low birth in surveys are the high cost of child-rearing, especially educational cost. Thus, apparently, it seems that low completed fertility rate in Korea is related to high child-rearing cost such as educational cost and rising educational level of women.
Data available for childbirth timing are birth records during 1982 to 2001. Since even the 20 year period in the data set is not long enough to cover one cohort’s complete fertility period, empirical analysis is focused on analyzing the timing of first birth among women whose first childbirth was in their twenties. Data showed that the average first birth age has increased, but the trend is not very strong within educational groups, and highly educated women tend to give the first birth late. The trend suggest that general rise in the educational level of childbearing women is an important cause for rising first birth age in Korea. The implication is that the fertility rate may not further drop since the upgrading of educational level will level off in the near future. Further, among the recent cohorts, it is found that the first birth age rose among those without jobs, while those among the employed remained relatively stable. The trend suggests that recent cohorts, for whom the severe recession following the economic crisis at the end of 1997 was in their late 20s, may have had to defer their first birth due to economic reasons. Then, the recent record-low total fertility rate may be transitory, reflecting the influence of the economic crisis on the childbearing decisions.
Foreign countries’ experience of policy effects on fertility shows that generally the effect is not significant. Subsidies on childbearing cost do not influence women’s decision on childbearing since the main cost of childbirth is child rearing cost and the human capital loss, which are spread over the lifecycle after the childbirth. Subsides for childcare facilities and childbirth/parental care leave are relatively effective among other policies for fertility although their effects are not large, either. Such policies should be viewed as “family policies,” which assists family lives and should be enacted even though they are not very effective in increasing fertility as those are for the welfare of people and not a means of “population policy” whose aim is at increasing population.

Chapter III. Macroeconomic Impact of Aging

Chapter III is comprised of two papers, which address the issue of macroeconomic impact of population aging in Korea using different methods. The first paper, "Macroeconomic Impacts of Population Aging in Korea," (by Kiseok Hong ) examines the long-run macroeconomic impact of population aging in Korea, using a computable general equilibrium (CGE) model of the Auerbach-Kotlikoff type.  Since Korea is one of the most rapidly aging countries, it is particularly important to predict the impact of the aging trend in Korea.  While there are many studies on the population aging of Korea, most of them follow a partial equilibrium approach.  By using a CGE model, this study provides a more integrated view on Korea's aging population.  A CGE model is particularly useful when evaluating the impacts of population aging separately from other long-run changes.  Korea is a transitional economy in many respects.  For example, even without the aging trend, the GDP growth rate in Korea may well slow down as predicted by the standard growth theory.  In order to determine the independent contribution of population aging on Korea's macroeconomic changes, it is more convenient to develop a computational model rather than an empirical model.
Under standard parameter values, the CGE model of this paper produces simulation results that are broadly consistent with common perceptions.   First of all, the model shows that, while the saving rate in Korea is currently at a level higher than the steady state, it will continue to fall over the next fifty years to reach a level below the steady state.  This pattern is not surprising, since the CGE model of this paper is based on the life-cycle hypothesis. Korea's population, while currently young, is aging rapidly.  According to the model, this demographic change generates both the currently high saving rate and the ensuing drop.
Patterns in other macroeconomic indicators also confirm the fact that the aging process in Korea is a movement from a young population to an old one.  The interest rate is currently high in Korea, because the young age structure of the population makes labor more abundant than capital. As the population ages, however, the capital/labor ratio increases lowering the interest rate. Similarly, per capita GDP will change from the current high level to a low level (compared to the benchmark case with a uniform age distribution) as the portion of young people decreases.   The portion of young people is positively correlated with per capita GDP because the young generation enjoys a higher level of productivity (intergenerational differences) and because people make more income when young (over the life-cycle differences).  To summarize, the simulation results of this paper show that the Korean economy will continue to benefit from its young population for a while.  However, since the population is aging very rapidly in Korea, the advantage of young population will soon disappear.  Also, for the growth rate of per capita GDP, the impact of population aging will be observed even earlier.  As per capita GDP converges from the current high level to the steady state, the growth rate will start falling in the next few years.
To be sure, these macroeconomic changes may not necessarily be negative.  For example, despite the fall in the GDP growth rate, the welfare level of each individual may not decrease.  For more rigorous evaluation of population aging, one needs to examine the welfare implications.  Welfare analysis of this paper shows that population aging has different impacts on different generations.  Future generations that enter the labor market in about 2030 or after (when the macroeconomic impacts of aging are fully realized) are expected to benefit from the demographic changes, while generations that enter the labor market before that time are expected to lose.  This result is based on the simple principle of factor pricing, i.e., that relatively scarce factors are priced high.  In the present and near future, labor is relatively abundant and thus the supplier of labor (young generation) gets worse off.  When the current young generation becomes old, however, labor will be relatively scarce and thus the supplier of labor will become better off. This suggests that impacts of population aging are more complicated than the growth rate alone suggests.
These results do not change substantially when the national pension system is introduced in the model.  One thing to note here is that the pension system of Korea is not sustainable in its current form and thus the model cannot be solved without assuming a specific pension reform scenario.  In this study, we assume that the current pension system is maintained without any reform until the fund is exhausted when the system is abolished altogether.  As a result of this extreme assumption and some other institutional factors, the introduction of the pension system causes sharp short-run fluctuations in the forecasts of macroeconomic indicators.  Main patterns in the forecasts, however, are roughly the same as before.  One important difference is that the pension system only increases the welfare of the current old generation at the expense of the current young and future generations.
The results of this study have several policy implications.  First, it is not clear whether population aging is necessarily bad for the economy as a whole.  While the growth rate falls, individual welfare may even increase depending on generations.  This suggests that economic policies in the aged economy should not stick to aggregate growth alone but pay more attention to intergenerational issues.  Second, population aging and the resulting macroeconomic changes are a very slow process.   As mentioned above, population aging affects the economy with great lags.  Thus, policies for population aging should be made with exceptionally long time horizon.  Third, the current national pension system of Korea only exacerbates the intergenerational welfare differences that result from population aging.  According to the analysis of this study, current and future young generations are adversely affected by the aging trend and by the national pension system.  Policies to alleviate the welfare loss of these generations, such as immediate pension reform, are needed.
We suspect that main conclusions of this study will change drastically in more realistic models.  Still, existence of intergenerational bequests and the possibility of endogenous fertility are important topics for future research.  Also, it will be interesting to apply the current model to the past period and see how well the model explains the past performance of Korea.
The second paper, "Population Aging and Economic Growth: Demographic Structure or Demographic Change?"(by Chin Hee Hahn ) addresses the issue of whether per capita income growth rate will decline as a result of population aging utilizing cross-country data. Two contrasting theoretical models provide the framework for empirical analysis of this paper; neoclassical general equilibrium overlapping generations models, such as Mills(1999), and growth theories modeling endogenous fertility and endogenous growth, such as Becker, Murphy, and Tamura(1990) and Lucas(2002). These two strands of theories have different implications on the relationship between population aging and per capita income growth. The former theories suggest that population aging will slow down per capita income growth primarily by reducing saving rate. By contrast, the latter theories suggest that population aging is not necessarily associated with reduction in per capita income growth rates, in so far as population aging and the associated decline in working age population ratio reflect the forces driving demographic transition which was initiated by the beginning of industrialization process. In fact, these theories imply that a country experiencing faster demographic transition is also likely to exhibit higher per capita income growth rate. Then, according to the former theories, demographic structure itself is likely to be systematically associated with economic growth while the speed of demographic transition, not the level of demographic structure itself, is likely to be systematically associated with economic growth according to the latter theories.
This paper first shows that, compared with other countries, the most distinguishing demographic characteristics of Korea during the 1961~1990 period lies in the speed of changes in various demographic measures, not in the level of such measures. For example, analogous to its high economic growth rates, the fall in population growth and fertility rates and the rise in working age population ratio in Korea were remarkable. Simple correlation analysis revealed that both levels and changes in demography measures were significantly associated with per capita income growth rates in expected ways, giving support to both hypotheses. However, although the fact that changes in fertility rate and in population growth rate are significantly correlated with per capita income growth is consistent with endogenous demographic transition and growth, it is not clearly explained by neoclassical overlapping generations models. The results from cross-country regressions are strongly supportive of theories by Becker, Murphy, and Tamura(1990) and Lucas(2002). That is, controlling conventional determinants of economic growth, countries with faster changes in working age population ratio or with faster decline in fertility rate also experienced higher per capita income growth. Although there were some evidences consistent with the neoclassical theories which suggest that countries with higher level of working age population ratio grows faster, they were not very robust.
Overall, the empirical evidence provided in this paper suggests that population aging by itself is not likely to be a serious threat to per capita income growth in the future. This will be particularly true if demographic transition reflects the tendency to prefer quality to quantity of children which arose with the process of industrialization, and if population aging is just another name of such demographic transition. If we step back to admit that population aging has an effect of slowing down per capita income growth through channels postulated by neoclassical overlapping generations models, the evidence of this paper suggests the possibility that there exist mechanisms which work to offset this effect.
Recently, it seems to be widely believed that per capita income growth in Korea will slow down aggravating fiscal burden as a result of population aging. Based on this recognition, various policy proposals have been suggested. These include not only reforms in pension system and labor market institutions but also promotion of childbirths and changes in immigration policy. However, proposed policies on childbirths and immigration could be understood as policies which view population aging itself as a source of the problem and are aimed at slowing the aging process itself.
This paper has indirect implications on the answers to the question of whether aging itself matters or whether institutions matter. The evidence from this study cast some doubt on the view that aging process itself is a source of the problem. Thus, policies that are aimed directly at retarding the process of population aging, such as promoting child births or relaxing regulations on immigration, are not likely to be justified on the grounds of population aging. Although the process of population aging itself may not warrant policy intervention, we cannot exclude the possibility that current institutions that are interrelated with age structure of population will become inappropriate and create distortions with population aging. Thus, policy response should be focused on reforming age-structure-dependent institutions in pension system and labor and financial markets, so that those institutions will not become obstacles to further economic growth.

Chapter IV. Impact on Public Finance

The rapid population aging in Korea is likely to pose a serious threat to the sound fiscal management in the future. It will not only shrink the national tax base as the size of working age population decreases, but it will also increase social expenditures targeted to both income protection and medical care of the elderly. In particular, social insurance expenditures such as public pension schemes and long-term health care of the elderly will take a leading role in budget expansion. Therefore, to prevent excessive fiscal burden resulting from increasing number of aging population and to sustain fiscal soundness, precautionary measures to protect national tax base and to contain social expenditures are urgently needed. This chapter examined the impacts of population aging on both fiscal revenues and fiscal expenditures. The first essay analyzed the relationship between population aging and the national tax burden. The second essay examined the effects of population aging on social insurance programs including public pension schemes and health insurance program in Korea. Major findings and policy implications from these studies are as follows.
The first paper, entitled “The Effects of Population Aging on the Tax Burden Ratio,” (by Chong Bum Ahn ) attempted to conduct an empirical study on the relationship between population aging and the tax burden ratio using the data of 30 OECD countries during the period of 1970-2001 based on the fixed effect model estimation method. In particular, we investigated the detailed channel of how population aging affects tax burden ratio by using the recursive equation model estimation.
The findings from the fixed effect model estimation show that the signs of the old age dependency ratio and the square of the old age dependency ratio are negative and positive, respectively, implying that the U-shaped form appears in the relationship between the old age dependency ratio and tax burden ratio. The results of the recursive equations model estimations indicate that the old age dependency ratio affects tax burden ratio directly in the form of U-shape. It can be also observed that the old age dependency ratio affects the tax burden ratio via GDP per capita and the ratio of the government consumption expenditure to GDP.
Based on the results of the recursive equation model estimations, we also projected the tax burden ratio of Korea during the period of 2002-2050. From this study, we found that the tax burden ratio in Korea would increase continuously. As the projection is based on the assumption that the balanced budget is maintained, the actual tax burden ratio may be lower than the projected tax burden ratio and there may be a serious budget deficit. Hence, to cope with the problems associated with the high tax burden ratio or the serious budget deficit, there should be an effort to sustain the balanced budget and to contain the government expenditures within its affordable range. For this purpose, a medium-term fiscal plan should be established, performance management system needs to be strengthened and various social insurance plans must be reformed.

Given the experiences of the advanced Western countries where the rapid expansion of social protection expenditures arising from aging population have led to increase in public expenditures with eventual adverse impact on national economy as a whole, the second paper, “The Effects of Population Aging on Social Expenditures,” (by Yongha Kim ), has attempted to analyze the effects of social protection spending on the public finance in Korea. The analysis has been carried out in two different sectors of income protection and medical protection. We first estimated the financial projections of both the income protection system and the medical protection system in the future, and discussed policy measures for addressing the problems arising from population aging. The analysis of this study has been based on the outcome of a simulation model which has incorporated various variables to reflect the factors affecting the aging population.
The results of the simulation confirmed that the aging population exerts great impacts on national pension as well as on medical insurance. This study confirmed that the national pension reserves will be exhausted by 2040 and the national pension payout will amount to some 7 percent of GDP by 2050 if the current system will remain unchanged. Besides, social expenditures to provide income protection to poor elderly who are not covered by the current public pension plans will add the significant pressure for budget increase in the future. As for the health insurance program, the total medical expenses will amount to approximately 8 percent og GDP by 2050 and the expenditures of medical aid to the poor will also increase rapidly. In sum, social expenditures for both old-age income protection and medical protection is expected to increase to nearly 20 percent of GDP, and thereby posing a great threat to fiscal soundness in the future. Hence, it is crucial to undertake reforms of the various social insurance programs to make them more financially sustainable and socially adequate. The structural imbalance of the current public pension schemes needs to be adjusted and the more comprehensive multi-pillar old-age income protection system should be established. As for the heath insurance program, measures to improve its managerial efficiency and to enhance cost-awareness of the providers and consumers of the medical services should be developed.

Chapter V. Impact on Financial Market

Chapter V consists of three papers examining important implications of aging on financial markets in Korea; relationship between pension system and private savings, changing asset demand along with changing demographic structure, and the role of pension funds in the development of capital market.
The first paper, "impacts of public pension on household saving in Korea," (by Kyung-Mook Lim and Hyungpyo Moo) analyzes the relationship between public pension schemes and household saving. There are two different public pension schemes in Korea. One is the Public Occupational Pension Scheme(OPS) that covers public employees, teachers and military forces. The other is the National Pension Scheme(NPS) that covers general public in the private sector. We investigated whether these public pension schemes affect household saving behavior. The empirical tests showed that there is a significant crowding-out effect of pension schemes on household saving. The estimated crowding-out effect of pension on household saving is between 20~60%, which is consistent with the cases of developed countries. Interestingly, the size of crowding-out effect of the OPS seems to be larger than that of the NPS. It may reflect the difference in the perception of pension wealth between participants of the OPS and the NPS, as the OPS was introduced relatively much earlier (several decades ago) than the NPS (introduced only in 1988). Hence the OPS affected its participants' saving behavior more significantly. If this is the case, it is expected that as participants of the NPS get aware of their expected pension wealth household saving could decrease further. Once we accept the empirical results that public pension schemes would reduce household saving, the size of national saving (household saving plus public saving) could be affected, ceteris paribus, by the design of funding policy of public pension system (funded vs. pay-as-you-go). If the current pre-funded base is maintained in the future, public saving would increase through pension fund accumulation. In this case national saving would not decrease as much as household saving is reduced, since the increase in public saving would offset the decrease in household saving. On the other hand, if pay-as-you-go base is adopted, national saving would decrease since public saving cannot compensate for the decrease in household saving. In this respect, funded pension system is preferred to pay-as-you-go system in the sense that the latter will reduce national saving and thus the level of welfare, unless there exists an excess capital accumulation in the economy.
The second paper, “Aging and asset demand in Korea” (by Chang-Gyun Park) tries to measure the effect of aging on demand for various categories of assets and predict the long-term trend in demand for assets based on the estimates and official population projection for the next 50 years. It is now a well-known proposition that changes in demographic structure convoluted with life-cycle pattern of individual saving decision may result in significant fluctuations in financial market. Aging is surely a major change in demographic structure. The main findings of the analyses are that demands for both total and financial assets are expected to increase continuously until 2030 and the proportion of risky assets in total financial portfolio is expected to decrease continuously again until 2030. Though our analyses produce a reasonable time series patterns of demand for assets, interpretation should be done with some caution. The panel data used in the analysis shows somewhat characteristic patterns different from those found in other countries such as the United States. The most striking feature is that the accumulation of financial assets remains at a remarkably low level in all age groups. Another notable characteristic trait of asset holding in Korea is that the proportion of stock holding individuals is very low and shows the usual inverted U-shape except for a huge jump for the very old (70 or older). If we were to attribute those abnormal patterns of asset holding to backwardness of financial market, projection of future demand for assets should be performed cautiously not to jump at a hurried conclusion entirely based on historic data. The policy implications, therefore, should be drawn based on characteristic feature of asset market in Korea. Low proportion of financial assets in total assets means high proportion of real assets, especially residential properties. While one can explain abnormally low accumulation of financial assets by high housing price and lack of long-term mortgage system, the estimated age profile of asset holdings does not seem to fit into typical age profile found in other countries. Various policy measures should be taken to help individuals transform into more balanced portfolios based on stability and liquidity to assure adequate provisions for old-age consumption.
The third paper, "On the Relationship between pension funds and capital market development,"(by Inseok Shin) examines theoretical and empirical evidences for claim that pension funds play an important role in development of capital market. However, we argue that the mere growth of pension funds itself does not assure proportional increase in beneficial effects. One can easily find a theoretical model to illustrate the situation that pension funds suffer from principal-agent problem and many empirical researches, especially in the United States indicate possible existence and significance of the problem. It is argued that devising a sound mechanism to solve the principal-agent problem is necessary to take advantage of beneficial functions of pension funds. Institutionalization of a transparent and efficient governance structure in pension fund management and establishment of market discipline based on competitive principle in asset management industry are given as two examples. We also conduct an empirical study to evaluate the role of competitive pressure in asset management industry. The evidence does not provide a definite answer but seems to indicate lack of competitive pressure in Korean asset management industry. The existence of negative equity premium at least up to now is a solid empirical fact in Korean stock market and we again confirm the anomaly. One can suspect a serious distortion in investment behavior of pension funds due to negative equity premium. The policy implications are obvious. There are two general necessary conditions to expect beneficial role of pension funds in development of capital market; good governance structure in pension fund management and well-functioning market discipline in asset management industry. Peculiarity of capital market in Korea calls for prior settlement of one problem. That is, holding risky assets should be properly compensated in the form of positive equity premium. The mission can be completed most effectively through improving infrastructure in capital market to enhance efficiency.

Chapter VI. Impact on Labor Market

The analysis on the impact on the labor market in Chapter VI focuses on the labor market behavior of the elderly. Presumably, with aging the size of the elderly population will increase and that of the young will decrease. However, the change in the composition of population by age groups does not necessarily imply shortage of youth labor and increased labor supply of the elderly. On the contrary, in European countries where aging has significantly progressed, the youth unemployment rate is still high and the elderly retire earlier than ever in the past. Obviously, labor market conditions are determined mainly by other factors than the aging itself. Thus, in an aged society, job creation is likely to remain as the most important policy objective, for which the known best policy is enhancing the labor market flexibility. The reason that policy for labor demand usually is not included in the study for labor market policy for an aged society is that the policy is a premise, and not that it is not important.
On the other hand, the elderly labor market is usually strongly influenced by institutional arrangement. For example, the early retirements are usually supported in some way or another by pension or other social insurance. The retirement decisions depend on mandatory retirement age or prohibition of age discrimination. Since the institutions in the elderly labor market are policy variables in that governments can change them, most policy studies address issues in the elderly labor market, especially the transition from work to retirement among the elderly.
The first essay, “A Preliminary Analysis of the Elderly Labor Market in Korea,” (by Kyungsoo Choi) presents long-term projection of the Korean labor force by extending the results of Hahn, Choi, Kim, and Lim(2002). The projection assumes rising female labor participation, and reduced labor participation among the elderly in the future as the share of rural population drops and the general educational level among them rises. Despite the falling participation rate the share of the elderly in the labor force is predicted to grow sharply with population aging as the elderly’s share in population rises fast, unless early retirement trend become pronounced. In addition, the educational level of the elderly is also predicted to upgrade rapidly in the future, resulting increased share of wage/salary workers among the elderly.
The transition from work to retirement is investigated using the EAPS (Economically Active Population Survey) data sets. The cross-section data provided only limited information on the transition, since the retirement decisions are inherently life cycle decisions for which analysis panel data are indispensable to control for individual effects. To make up for the data deficiencies, he constructed a synthetic cohort and performed cohort analysis along with cross-section data analysis. As the labor participation rate among the elderly in Korea still remains at a high level and does not show much variation across years, it is commonly thought that the transition is a gradual one and the retirement age will remain high in Korea. However, the results reveal that retirement decisions in Korea are sensitive to economic conditions as the labor participation rates by ages among the elderly show significant variation across years especially from 60 to 64 years old. Further, synthetic cohort analysis reveals that the transition from work to retirement is much more abrupt among the wage/salary workers especially among the regular workers. That is, they tend to move out of labor force once they retire from their career jobs. Such results, if combined with the previous projection that the share of educated and wage/salary workers among the elderly will increase in the future, suggest that the influence of institutional arrangement in the elderly labor market will grow in the future in Korea. Then, one could not rule out the possibility of early retirement trend in the future elderly labor market as the National Pension System matures, which we observe in today’s elderly labor market in advanced countries.
The second essay, “Changes in the Labor-Force Participation of Older Males in Korea: Trend and Forecast” (by Chulhee Lee ) estimates the labor force participation rate (LFPR) of older males in Korea from 1955 through 2000, and analyzes the effects of a number of determining factors of labor-force participation decisions at older ages. The LFPR of older males 60 and older substantially increased from the mid-1960s to the late-1990s. This pattern is sharply distinct from the historical experiences of other OECD countries that witnessed a rapid decline in the LFPR of older males over the last century. The rise in the LFPR of older males in Korea between 1965 and 1995 is largely explained by the dramatic increase in the labor-market activity among the rural elderly population. The results of regression analyses suggest that the acceleration of population aging in rural areas due to the selective out-migration of younger persons was the major cause of the sharp increase in the LFPR of older males. According to the regression results and the anticipated changes in the determining factors of labor-market activity of the elderly, it is likely that the LFPR of older males in Korea will greatly decline in the future, making the potential adverse impacts of the population aging even worse.

발 간 사

요 약

제1장 고령화, 무엇이 쟁점인가?

제2장 인구구조 고령화의 전망과 분석(최경수)

　　1. 연구의 필요성
　　2. 우리나라의 인구변화 추이
　　3. 우리나라 인구변화의 전망
　　4. 우리나라 출산율 하락에 대한 분석
　　5. 출산지원 정책의 효과 및 정책적 시사점

제3장 고령화와 거시경제

제1절 인구구조 고령화와 거시경제적 파급효과(홍기석)
　　1. 서 론
　　2. 인구 고령화의 추세
　　3. 모형
　　4. 일반균형 모형을 이용한 인구 고령화의 파급효과 추계
　　5. 결론
　　<부록> 생산성증가가 없는 경우의 인구고령화의 거시경제적파급효과

제2절 고령화와 경제성장: 인구구조 혹은 인구구조 변화(한진희)
　　1. 한국의 인구구조 변화 추이
　　2. 인구구조, 인구구조 변화, 경제성장
　　3. 요약 및 결론

제4장 고령화와 재정

제1절 고령화가 조세부담률에 미치는 영향(안종범)
　　1. 서 론
　　2. 조세부담률 결정에 관한 이론적 고찰
　　3. 조세부담률 결정요인 추정
　　4. 고령화가 조세부담률에 영향을 미치는 경로분석
　　5. 고령화 추이에 따른 미래의 조세부담률 예측
　　6. 결 론

제2절 노령화에 따른 사회보장지출의 정부재정에 대한 효과 분석(김용하)
　　1. 서 언
　　2. 인구고령화에 따른 소득보장 비용과 재정
　　3. 인구고령화에 따른 건강보장 비용과 재정
　　4. 결론 및 정책제언

제5장 고령화와 금융시장

제1절 공적연금이 가계저축에 미치는 영향(임경묵?문형표)
　　1. 서 론
　　2. 기존 연구
　　3. 우리나라의 공적연금제도
　　4. 실증분석
　　5. 결론 및 시사점
　　<부록 1> 공적연금 기대연금자산의 계산
　　<부록 2> Pooled 회귀분석결과
　　<부록 3> 표본 구축과정

제2절 고령화의 진전과 자산수요의 변화(박창균)
　　1. 서론
　　2. 인구구조와 자산시장: 선행연구 및 논점
　　3. 실증분석
　　4. 결 론
　　<부록 1> 인구구조 변화와 자산시장
　　<부록 2> 대우패널의 개요 및 연구에 사용된 자료의 구축
　　<부록 3> 표본의 기초 통계량
　　<부록 4> 예측자산수요
　　<부록 5> 개별 자산에 대한 분석

제3절 연기금의 자본시장 발전촉진론 검토(신인석)
　　1. 머리말
　　2. 연기금의 금융시장 발전촉진론 검토
　　3. 우리나라의 전제조건 검토: 자산운용산업의 경쟁원리
　　4. 맺음말

제6장 고령화와 노동시장

제1절 고령층 노동시장에 대한 기초적 분석(최경수)
　　1. 서 론
　　2. 노동력의 고령화
　　3. 고령층의 은퇴 양상
　　4. 요약 및 향후 연구과제

제2절 우리나라 고령남성의 경제활동 변화: 추세와 전망(이철희)
　　1. 머리말
　　2. 고령남성 경제활동참가율의 장기적 추이
　　3. 고령남성 경제활동참가율 결정의 분석
　　4. 농촌고령남성의 경제활동참가율 증가요인
　　5. 고령남성 경제활동참가율의 장래전망
　　6. 맺음말

제7장 요약 및 정책시사점