Mon, Nov 19, 2012 - Page 8 News List

Prepare for the nations’ population implosion

By Color Lee 李翼文

Taiwan’s population structure is still enjoying a “demographic dividend,” meaning that a large proportion of the population is of working age, and working people have relatively few elderly people and children to support. However, the birth rate has fallen for three years in a row. In 2010, the total fertility rate, a measure of the average number of babies born to each woman in her lifetime, was just 0.9. This trend toward having fewer children will lead to an older population. There will be fewer people of working age, and those in work will bear a heavier burden of providing care and welfare.

A report published by the Council for Economic Planning and Development says that Taiwan’s birth and death rates are forecast to come to a crossover point in 2022, after which the death rate will be higher than the birth rate. From then on, natural population growth will give way to natural decline, and the population structure will gradually get older as the total population falls.

As of last year, Taiwan’s “population pyramid” was wide in the middle, and narrow at the top and bottom, forming the shape of a paper lantern, meaning that labor was in plentiful supply.

However, by the year 2060, the total population will have fallen and the pyramid will be shaped like an upside down bell.

When that happens, society’s care and welfare burden will be heavier than it is now. In 47 years’ time, there will only be half as many people of working age — between 15 and 64 years old — in Taiwan as there are now. The nation is set to become an aging society in 2018 and a super-aging society in 2025. Although the total population in 2060 will be about the same size as it was in 1983, the age structure will be very different.

Changes in population structure have wide-ranging effects. Education, the economy, healthcare and social welfare are all affected. As the number of young people gradually falls and the number of elderly people rises, it is foreseeable that McDonald’s restaurants will no longer be filled with the sound of happy children, but only with the murmur of elderly folks’ conversation.

Fewer women will be seen registering for treatment in obstetrics and gynecology departments, which along with pediatric clinics will have to be turned into geriatric care centers. Closed and deserted schools will be seen everywhere, while jobless teachers wander the streets in search of work. The country’s employment environment will be transformed, and changes in the workplace will cost a great deal in social resources.

A balanced population structure is a vital element for industrial development. A falling birth rate and an aging and shrinking population will result in fewer consumers and weak demand in the domestic market. When there are not enough consumers supporting the market, businesses will no longer be nourished by demand, and that will make it much harder for them to cope with competition in the export market. A sound domestic market is an essential foundation for development of exports, but in the future, that foundation will be missing.

It is easy to not notice where Taiwan’s population is headed.

The problems will not manifest themselves straight away, but by the time they do, they are likely to be very serious. Since it is clear that the population structure is going to change, the government needs to deal with more than just problems that are already evident, like whether to stop levying capital gains tax on securities market transactions and how to avoid bankruptcy of the Labor Insurance Fund.

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