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In regards to your conclusion, I'm not sure this is really entirely true. While Japan is a disaster right now, their situation (by my understanding) was made m

by MLR 8y ago

In regards to your conclusion, I'm not sure this is really entirely true. While Japan is a disaster right now, their situation (by my understanding) was made massively worse through bad economic choices when their economy first started slowing down. Germany and South Korea are two examples of extremely robust economies that have had terrifically low birth rates for a long time now, Germany has had fairly high levels of immigration, but South Korea certainly hasn't. There's also the fact that countries like the US and the UK don't have particularly bad population pyramids but are still strangling the youth to some extent, it's more a political problem than a fundamental outcome of low birthrates and welfare states.

IkmoIkmo 8y ago
I'm not so much referring to the economy right now necessarily. That will be affected, but the population pyramid is just one of many other factors, it's not a great proxy for the long-term sustainability of the welfare state and the burdens on young and middle-aged people in 30 years from now. Anyway, Japan and Korea really aren't comparable. Just look at their pyramids. Starting with the 64+ population, grew in Japan from 5% to 26%. Further, it's not just children (<14) who're a lower share than before, but also the working population of 15-64 which is smaller than before (from 64% to 60%). In short, old:working age went from 1:13 to 1:2 (rounded off). https://countryeconomy.com/demography/population-structure/japan https://countryeconomy.com/demography/population-structure/j... South Korea is in a very different stage. Its 64+ population only went from 3% to 13%. Meanwhile its working population from 15-64 didn't drop like in Japan but went up from 53% to 73%. If anything, Korea is in an amazing position right now and has been for some time. It's only now levelling off and going the other direction. https://countryeconomy.com/demography/population-structure/south-korea https://countryeconomy.com/demography/population-structure/s... In short, old:working age went from 1:18 to 1:6 (rounded off). For every old person in Japan, Korea has 3 times as many working age people. And that puts a lot of pressure on the tax base, even if the economy is doing well, a greater share of production is redistributed away from young and working people to old and not working people. In a country where one young person has to produce as much wealth for himself and one old person, as another country where two young people can share that burden, there's a difference in pressure and sustainability of the welfare state. Fact of the matter is that Japan is running a deficit on its social security system. You either need to raise taxes or expect welfare state retrenchment (which has happened in most developed countries over the past 30-40 years in large parts anyway). You can only raise taxes so much (Laffer curve). It's typically deemed as inevitable that Japan's welfare state will retrench unless it accepts immigration or technology rapidly does away with humans. I don't see either of these happening in the next few decades, so young people pay to support a system today that they're likely not going to enjoy to the same degree in the future.

by MLR 8y ago

IkmoIkmo 8y ago

I'm not so much referring to the economy right now necessarily. That will be affected, but the population pyramid is just one of many other factors, it's not a great proxy for the long-term sustainability of the welfare state and the burdens on young and middle-aged people in 30 years from now. Anyway, Japan and Korea really aren't comparable. Just look at their pyramids. Starting with the 64+ population, grew in Japan from 5% to 26%. Further, it's not just children (<14) who're a lower share than before, but also the working population of 15-64 which is smaller than before (from 64% to 60%). In short, old:working age went from 1:13 to 1:2 (rounded off). https://countryeconomy.com/demography/population-structure/japan https://countryeconomy.com/demography/population-structure/j... South Korea is in a very different stage. Its 64+ population only went from 3% to 13%. Meanwhile its working population from 15-64 didn't drop like in Japan but went up from 53% to 73%. If anything, Korea is in an amazing position right now and has been for some time. It's only now levelling off and going the other direction. https://countryeconomy.com/demography/population-structure/south-korea https://countryeconomy.com/demography/population-structure/s... In short, old:working age went from 1:18 to 1:6 (rounded off). For every old person in Japan, Korea has 3 times as many working age people. And that puts a lot of pressure on the tax base, even if the economy is doing well, a greater share of production is redistributed away from young and working people to old and not working people. In a country where one young person has to produce as much wealth for himself and one old person, as another country where two young people can share that burden, there's a difference in pressure and sustainability of the welfare state. Fact of the matter is that Japan is running a deficit on its social security system. You either need to raise taxes or expect welfare state retrenchment (which has happened in most developed countries over the past 30-40 years in large parts anyway). You can only raise taxes so much (Laffer curve). It's typically deemed as inevitable that Japan's welfare state will retrench unless it accepts immigration or technology rapidly does away with humans. I don't see either of these happening in the next few decades, so young people pay to support a system today that they're likely not going to enjoy to the same degree in the future.