Munich Personal RePEc Archive

Taiwan’s Rapidly Aging Population: A Crisis in the Making?

Chen, Chien-Hsun (2023): Taiwan’s Rapidly Aging Population: A Crisis in the Making?

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A rapidly aging population became a pressing demographic issue in Taiwan in the 1990s due to industrial transformation, family planning and urbanization in the 1970s and 1980s. An aging population tends to lead to less human capital and lower economic growth. The percentage of population aged 65 and above was 13.2% in 2016, while the figure is expected to jump to 16.0% by 2020 and 19.8% by 2025. Taiwan’s total population is projected to register a negative growth rate by 2025. The spike in old-age dependency ratios will deeply affect future labor markets. As the population ages, the working-age population has experienced a declining trend since 2015. Indeed, an aging population is expected to slow down economic growth and raise government spending on social welfare and health care programs, negatively impacting future fiscal sustainability. An enlarging aging population has turned out to be a politically strong force to be reckoned with during elections. Long-term care insurance products could reduce family burden and provide high quality long-term care. It supplements old-age support provided mostly by the family in accordance with Taiwanese cultural values; the family hence still plays a pivotal role in long-term care.

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