Inevitable Risk? Taiwan as An Aging Society

Fen Ling, Department of Social Work, National Taipei University College of Social Sciences


Based on an international indicator, population composition with age group over 65 years old exceeding 7% is considered an "aging society." Taiwan has shifted into an aging society in 1993 and increases to 11.5%in 2013.In 2012, The Council for Economic Planning and Development projected that the senior population will reach 30% in 2040 and 39.4% in 2060.


Even though our senior population is not the most, Taiwan has the highest aging trend in the world. Figure 1 illustrates the percentage of senior population grows faster than other countries. In Europe and the US, the percentage of senior population increased from 7% to 14% in 60 to 100 years; it only took 25 years in Taiwan. It is worth noting that the time period for the increased senior population from 10% to 20% was much shorter in 19 years, comparing to between40 and 80 years in other developed countries. Therefore, Taiwan should anticipate significant social impacts from aging population. This issue is associated with challenges in health care, social protection, supporting family mechanism, economic security, living conditions, public transportation and life learning for senior citizens. It also increases the financial burden for the next generations and the overall impact on social productivity. Without a doubt, aging society is creating risks for social welfare systems. Considering cross-generation distribution of heal care resources, it is difficult to calculate proper social insurance fees to reflect intergenerational justice. Currently, the pension and universal health care in Taiwan employ "partial funding" system., which allows a mixture of full fund and adjustable insurance rates. In Germany, the portion of full fund is even smaller, which means the younger generation would pay more for the elder's pension and health care. With the population composition changing, the calculation for insurance fees has become increasingly complex and difficult.


Figure 1:The Percentage of Senior Citizens in national Population

資料來源:聯合國"World Population Prospects: The 2010 Revision"、經建會「中華民國2012年至2060年人口推計」,101年8月。


The senior population will increase the burden of young people. The dependecny ratio of Taiwan is declining after the World WarⅡ. In 2013, the dependency ratio was 34.9%, the lowest in hisotry. Accoridng to the official prediciton, this ratio will increase dramatically after 2012 and reach 47.8% in 2025, 69.8% in 2040 and 97.1% in 2060. In the past, most of the dependents in Taiwan were children. The young dependency ratio(YDR) was 81.82% in 1956 and 50.52% in 1950. In 2012, the YDR was  19.72% and was steady ever since. On the other hand, the old dependency ratio(ODR) increases year by year. ODR was 4.55% in 1956 and climbed to 15.03% in 2012. It is estimaed that the ODR will hit 77.7% in 2060 and expected that the cost associated with senior population would become the main burden for working population. Consequently, the intergenerational justice will become an important issue in the future.


Population growth continues and  Taiwan is projected to have the highest population density in the world only second to Bangdalesh. Associated social impacts may include availability of living space, pressures on environmental protection, and detereation of living quality. In addition, among Asian countryies, Taiwan has the highest number of foreign nursing labors (mainly from Southeast Asia) for our senior citizens' daycare As the economy in Southeast Asia is growthing rapidly, the question arises whether there will be a decline in exporting their labors. Therefore, it is a critical time for Taiwan to rethink our health system for the senior citizens.


Based on current trends, Taiwan's labor force continues to shrink. The tradition virtue that the "sons are for taking care the elderly" is being challenged and our society needs proactive strategies in coping with the age of modernization. In the past, financial supports of the elderly come from their children; decreasing numbers in children population will affect the intergenerational resource transfer. In the aging society with fewer children, it is more and more difficult to support the tradition of using private resources to take care of the senior citizens. As a result, there will be a role for government and public sectors to transfer the resources from individual families to the public good.


Current research has examined negative impacts of the aging population on society. However, we can view the issue from different perspectives. First, we can redefine the age of the "elder people." According to "exit theory", 65 years old is the age to exit the labor forces and economic productivity. In the 21st century with progressive medical science, the so-called elder people remain in good physical shape and mental conditions. The physical aging process might have been postponed ten to twenty years. Second, current middle-to-old age generation grew up in the golden age of Taiwan's economic development and might have accumulated more assets than young generation. As a result, it is likely that the young generation rely on the elder generation instead of the "aging society" model which is the vice versa.


To sum up, the population compostion is changing so fast that the current family structure and social systems are being challenged, especially the model of "individual support from families". With the dependency ratio and the unemployment rate rising among the young generations, the governemrnt will play a critical role in assiting families in the aging society. Current social welfare policies have focused more on the support for low and middle income families; however, attentions should be also paid to the double income families for their duties in taking care of the elderly, as well as families hiring foreign labors for seniors' care. In other words, we should start to explore the possiblity of trasfering private resources to colletive public good.


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