Taiwan’s declining birthrate has raised concerns among the nation’s policymakers since the early 1990s due to the concomitant emergence of an increasingly aging society. This, in turn, will have serious negative impacts on Taiwan’s economy, educational and healthcare systems, government budgets and national competitiveness.
These concerns were raised again recently in the latest population projections published by the Cabinet’s Council for Economic Planning and Development. These indicated that Taiwan’s progress to becoming a graying society is even faster than it had projected earlier.
Two years ago, the CEPD projected that Taiwan would enter an era of zero population growth by 2022. The new report, however, revised this figure, bringing it forward four years. This shows just how difficult it is to make accurate forecasts regarding birthrates, as does the CEPD’s 2000 estimate of 320,000 newborn babies in 2004, compared to the actual figure of 220,000.
CEPD planners were similarly disappointed that Taiwan has joined Japan as one of the fastest graying societies in the world. Just as in Japan, the number of Taiwan’s citizens over 65 years of age represents around 15 percent of the entire population. This figure has risen sharply from 7 percent in 1980, and the CEPD report projects it will reach 20.6 percent in two decades’ time.
The direct and negative impacts of an aging society on economic development can be seen in Japan’s economic bubbles of the past 15 years. Similarly in Taiwan, the immediate effect of low birthrates has been a reduction in demand, which, in turn, has cut production outputs and lowered prices.
Long-term effects include a decrease in labor supply, which leads to a decline in productivity and rise in labor costs. If trends in Taiwan are similar to those witnessed in Japan, then the nation’s economic development will suffer severe impact.
In its 2007 policy directive issued earlier this year, the Cabinet outlined its plans to care for Taiwan’s rapidly graying population through stipends for elderly farmers, subsidies for seniors’ welfare, a new retirement system, second-generation health insurance policies, improvements to medical services, protection for society’s underprivileged and implementation of a national pension scheme as soon as possible.
The upcoming National Conference on Sustainable Economic Development is also slated to address the birthrate and aging problems and, it is to be hoped, through some imaginative thinking, will also advance some practical and achievable measures.