Sang-Hyop Lee

Using the Milligan and Wise ( 2015 ) and Cutler, Meara, and Richards-Shubik ( 2013 ) methodologies, we examine (i) how much would people today with a given mortality rate or life expectancy work if they were to work as much as those with the same mortality rate worked in the past, and (ii) how much could older adults extend their working lives if their health status improved. The results point to a sizable health capacity to work (HCW) among both older Korean men and women. Furthermore, the results imply that HCW is concentrated among more educated urban senior residents with access to the statutory pension system. We explain our results in the context of the Republic of Korea’s labor markets and old-age support systems. The results for the Republic of Korea imply that the previous results for other high-income economies, such as European countries and the United States, may not be applicable to high-income economies with underdeveloped pension systems.

The youth population of Asia is in the midst of a remarkable transformation with enormous implications for the future of the region. Rapid population growth of the youth population is beginning to ease and to decline in China and other low fertility Asian countries. An increase in spending on human capital has accompanied the decline in fertility rates, however, so that incoming cohorts of youth will be smaller but much more educated than in the past. The rise in education and other factors have influenced the transition into adulthood for youth. They are staying longer in school and entering the labour force at a later age supported by a combination of public and private transfers. A willingness to invest in youth has been an essential element to realizing the benefits of the demographic dividend in Asia.