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Welfare implications of an aging population in Korea

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  • Welfare implications of an aging population in Korea
  • Hong, Ki Seok
  • The Korean Economic Association


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Title Welfare implications of an aging population in Korea
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Material Type Reports
Author(English)

Hong, Ki Seok

Publisher

[Seoul]:The Korean Economic Association

Date 2007
Subject Country South Korea(Asia and Pacific)
Language English
File Type Link
Subject Social Development < Population
Government and Law < Public Administration
Holding The Korean Economic Association

Abstract

This paper examines macroeconomic impacts of population aging in Korea using a computable general equilibrium (CGE) model of AuerbachKotlikoff (AK) type. The conventional AK model is extended in order to incorporate open economy features and endogenous fertility choices. By applying this model to the current demographic structure of Korea, we obtain the following results. First, welfare implications of population aging are rather complicated, since there are both winners and losers. While current and future young generations will be harmed by population aging, current elderly generations benefit from the trend. Second, policy responses to population aging should be considered with great caution. Fertility promoting policies, for instance, may entail substantial redistribution of resources among individuals from current and future generations. Third, opening up the domestic capital market may be less controversial but a more effective policy response. (The rest omitted)