Aging Population and its Impacts on Fiscal Sustainability

By Naoyuki Yoshino, Chul Ju Kim, and Pitchaya Sirivunnabood


The world is in the midst of demographic change, with varying degrees, towards population aging. Though mixed trends were demonstrated in the G20 community, it is projected that most G20 economies would experience a significant degree of population aging. The impact of population aging is enormous and multifaceted i.e., deteriorating fiscal balance, changes in patterns of saving and investment, shortage in labor supply, lack of adequate welfare system, particular in developing economies, a possible decline in productivity and economic growth, and ineffectiveness of macroeconomic policy. This policy brief proposes policy recommendations, covering comprehensive structural reforms, public finance reforms, and reform of public and private pension schemes.