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Aging society not ailing society

By Lena Zhang
0 Comment(s)Print E-mail Shanghai Daily, November 8, 2011
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Financial burden

The financial burden additional children place on their families can be significant, especially in urban areas. And this will undoubtedly accelerate resource depletion.

Parents might be better off relying on the savings from havings from having fewer children, rather than relying to a large extent on their children's dwindling sense of filial duty, or the country's social security, when they get old.

In addition, low fertility has been the driving force behind female labor-force participation and higher human capital investment in the younger generation.

The latter may help reverse the adverse effects of a seemingly unfavorable age structure by replacing large cohorts of less productive members with small cohorts of better educated, more productive ones.

And last but not the least, today's China is home to hundreds of thousands of NEETS (people not in education, employment, or training) who are living off the savings of their retired, or close-to-retirement-age parents. Some even draw on their grandparents' meagre pension to make ends meet.

These NEETS mainly come from two social groups - city dwellers who are unable, or unwilling, to meet the challenges of a fiercely competitive job market (which is a sign that labor supply exceeds demand, and just another reason why we need not worry too much about a labor shortage in the future), and rural residents who might have been too poorly equipped for work due to a shortage of everything from doctors, to teachers, to food (which is precisely why we need to keep fertility low).

The China State Council and China National Bureau of Statistics have shown that both male and female workers saw substantial drops in labor-market participation between 1990 and 2005, suggesting that increased demand for labor stemming from the retirement of large cohorts of older workers could indeed be met by drawing the large unemployed, or under-employed working-age population into the labor market.

I believe that an aging society is a normal result of economic development worldwide. The challenges are somewhat bigger for the Chinese because we are yet to pay back the huge population debt our grandparent's generation was wrongly encouraged to create.

Although the human instinct to procreate is natural, in this day and age we must keep in mind that an individual's welfare is strongly correlated with the welfare of their society.

In an over-crowded China, even an aging society is unlikely to cause enough hardship to justify a premature end to our tested Family Planning Policy.

Quite the contrary, the fruition the policy is achieving in terms of economic boom and per capita income growth should be guarded with great care.

Luckily, population aging in China will not cause major demographic upheaval for another decade or two, providing our policy makers a window of opportunity to prepare for the change by promoting education and improving productivity.

As demographer Reiner Klingholz has pointed out: as long as people grow older in good health and education, there would be no real aging problem.

The writer is a freelancer who now lives in Shanghai.

 

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