Recently, a report from a national research institute has been the talk of the town. Titled "Suggestions for Fiscal Policy Direction to Respond to the Decline in the Productive Age Population Ratio," the report was published by the Korea Institute of Public Finance (KIPF).

In the report, KIPF senior research fellow Jang Woo-hyun listed step-by-step measures to address the low birth rate and ensure a working-age population. One of the measures suggested is encouraging retired older adults to move overseas. The reason behind this suggestion was surprising: "If seniors can relocate to countries with relatively low cost of living and mild climates and spend their retirement years there, it can help to increase the proportion of the working-age population quantitatively," the report stated.

Before we can even consider the effectiveness of these measures, they are unlikely to be realized. South Korea's constitution guarantees freedom of residence, making it doubtful that older adults would want to emigrate. Even those who have moved abroad often return home in their later years seeking quality healthcare. Regardless of how they might be compensated, who would want to relocate to a foreign land for the sake of national interest?

The bigger problem with this report is its view of older adults. The report assumes that older adults are an unproductive demographic, portraying them as people merely waiting to die, unable to survive without someone's care.

This view is echoed in the Bank of Korea's "Measures to Ease the Shortage and Cost Burden of Manpower in Care Services," released in March. The BOK report states that the current labor shortage in the care services sector, particularly in nursing and childcare, is leading to a significant cost burden and various social problems. According to the report, this issue will become more severe as the population ages. The supply shortage for caregivers is expected to increase from 190,000 in 2022 to 380,000-710,000 in 2032 and further to 610,000-1.55 million in 2042. The report also highlights that the productivity losses due to the burden of family caregiving will reach 2.1 to 3.6 percent of GDP in 2042.

To address the labor shortage in the care services sector, the BOK has proposed the following measures. First, it is not feasible to meet the increasing demand with domestic workers alone, so foreign workers should be utilized. Second, measures should be implemented to reduce the cost of hiring foreign workers. For instance, the country should include care providers in the employment permit system for foreigners and establish a relatively low minimum wage for these workers.

The problem with the BOK’s view is that it lacks the most basic recommendation: that a country should prevent care needs by promoting healthy aging policies. This aside, the BOK's view suffers from the classic “Snapshot Fallacy.” The Snapshot Fallacy refers to the failure to anticipate change and to view the world in a “taxidermied state.” It assumes that people's lives in each age group will remain the same, not reflecting improvements in life expectancy and economic development. The generations that are assumed to be in need of care in 2042 are the baby boomers and “Generation 86,” who went to college in the 1980s. The BOK report assumed that they would age similarly to the current older adult population after nearly 20 years.

No, they won’t. The current baby boomers, those in their mid-to-late 60s, many of whom are still in the workforce, are healthy and energetic. The Generation 86, now in their 50s, are younger and healthier than the baby boomers. Population studies also show that the proportion of people aged 65 and older with frailty is gradually declining.

According to a study conducted in Japan, which experienced aging before Korea, the proportion of older adults with frailty fell from 7 percent to 5.3 percent between 2012 and 2017. A historical comparison of Korea's National Health and Nutrition Examination Survey results, as I discussed in my previous columns, also shows that the proportion of people aged 65 and older who are frail is gradually shrinking. Korean older adults are getting healthier. As such, what people in their 70s and 80s look like today will likely be quite different from what people in their 70s and 80s will look like in 10 to 20 years. Therefore, it will be more valid to project into the future by adjusting both the age at which people will need care and the age at which people will be able to participate in the workforce, including caregiving, to reflect this reality.

The KIPF report and the BOK report were based on Statistics Korea’s population projections, which have served as the initial source for the media's ongoing coverage of the challenges of an aging population. According to Statistics Korea's population projections, the old-age dependency ratio (the number of older adults divided by the working-age population) will reach 91.4 percent by 2060. This paints a bleak picture of the future for the super-aged society. However, there's a catch. This analysis is based on the current definition of older adults as 65 and older. If we were to gradually raise the age of what is considered older adults to 76, assuming people live longer, healthier, and more active lives, the old-age dependency ratio in 2060 would only be 43 percent. This difference is significant when the analysis framework is adjusted to reflect current realities.

It is challenging to predict the future and guide policy. We don’t know exactly what will happen in the future. Who would have thought that in 2020 we would have a pandemic and that it would not be resolved for so long? Still, it makes sense to at least take into account predictable factors. There is a clear trend that humans are working longer and healthier than ever before, which is pushing up both the age of retirement and the age at which care is needed. There's also ample evidence that active aging that keeps people engaged in society creates a virtuous cycle that prevents frailty, dementia, and care needs.

Policies that ignore these changes and are stuck in the Snapshot Fallacy of projecting a future population pyramid onto the present can lead to unnecessary fear and confusion. The societal costs of introducing measures that were never needed or would have been less than necessary in the first place due to poor policy analysis can be unimaginable. Once policies are implemented, they are very difficult to reverse. This is why future projections and policy proposals in the age of the super-aged society must accurately reflect reality.

Jung Hee-won, a geriatric physician at Asan Medical Center, graduated from Seoul National University College of Medicine and trained at Seoul National University Hospital. During his med-school days, while practicing the horn, he realized the importance of muscle maintenance and became interested in sarcopenia. His main research interests include frailty, sarcopenia and establishing age-friendly health systems for acute hospitals. This column was originally published in Chosun Ilbo in Korean on June 19, 2024. -- Ed.