Due to a falling marriage rate, or people waiting longer to get married, and a declining birthrate coupled with medical advances, increased living standards and longer life spans, Taiwan officially became an aged society in 2018.
Ministry of the Interior population statistics for the first eight months of this year show 116,389 deaths and 105,161 births, or a net population decrease of 11,128 — the first time a decline has been recorded.
Since Taiwan became an aged society, the annual average of childbirths has decreased by about 8,000 to 9,000 each year, while the number of people aged 65 or older has increased significantly, making Taiwan one of the world’s fastest-aging societies.
According to a National Development Council report on population projections through 2070, the decline began this year, two years ahead of what was expected.
Sixteen percent of the population is aged 65 or older and that is expected to increase to 20 percent by 2025.
If it does, Taiwan will officially have become a super-aged society one year ahead of projections.
An aged society with a negative population growth rate is likely to have important implications.
The demographic imbalance, due to a fall in the ratio of working-age population to old population, will have a huge impact on the economy and society, regardless of pension reforms and improved state finances.
For example, a low birthrate and longer lifespans will mean that spending from the Labor Insurance Fund will exceed revenue. It is estimated that the fund could go bankrupt by 2026.
The negative population growth rate and its effect on the labor force will result in a top-heavy, “inverted triangle” demographic.
The increasing number of older people, coupled with rapidly increasing demand for medical treatment and long-term care, will result in a shortage of medical resources and a lack of long-term carers, as well as shrinking government finances and tax revenue, and create a higher need for subsidies for poor and disadvantaged people.
On top of that, young people have to live with low salaries and are unable to afford property, which will contribute to their feeling of insecurity.
These factors will have a deleterious effect on Taiwan’s economy and society, to the extent that it is elevated to a national security problem.
The government needs to find an appropriate way to deal with the huge socio-economic impact that population decline will have on the nation.
For example, to address the effects of a rapidly aging society, the government needs to improve control of state finances to reduce the accumulation of debt.
On the problem of a declining labor force, it must explore ways to increase job opportunities for women, while allowing people to work until a higher age, which will increase the labor force participation rate.
The government must also investigate how to increase the use of smart applications and automation to supplement shortfalls in the labor force.
However, the most important challenge is to increase the birthrate, maintain the population and stabilize the nation’s demographic structure.
The government should establish a cross-departmental committee to propose concrete, viable policies to ensure the sustainable governance and security of the nation and its populace.
Lee Shen-yi is vice chairman of the Contemporary Taiwan Development Foundation.
Translated by Paul Cooper
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