Ageing in Asia: The growing need for social protection
| Executive summary
Abbreviations Part 2. Population ageing worldwide The aged in Asia and other regions Global 'dependency ratios' A growing proportion of the aged is very old Sex ratios of the elderly Implications of demographic shifts The aged in Asia today Health status and capacity Living situation Economic activities
Part 3. Ageing and developments in social protection in Asia Ageing in the context of social and economic change Development and population ageing are connected Retirement trends The changing Asian family system Limit to family support; growing collective provision
Approaches to collective economic security Social assistance schemes Provident funds Social security
Part 4. Policy issues and options for the aged Helping the elderly poor Poverty and declining work opportunities for the aged Poverty: Loss of family support The aged without spouses The childless Migration of family members When the family cannot provide support Social protection: What mix of programmes? Living options: Meeting the needs of changing life circumstances of the aged It's not a choice between family and government support Institutional versus at-home living arrangements The 'crisis' of population ageing |
Most countries in Asia have a relatively young population at present. By 2025, however, the majority of the elderly in the world will be living in Asia. Several Asian countries will experience a rapid change from young to old in their demographic structure. What are the consequences of the change? Is the reliance on strong family structures, in which it is considered a duty and a privilege to take care of the aged in the family, sufficient to cope with the increasing numbers of the elderly? What is happening to the elderly today? Which are the social protection measures presently in place? What are the issues that need to be tackled when a large part of the population is older? What are the policy options?
The study provides an overview of the demographic changes taking place in Asia and raises a number of important issues related to the growing proportion of the elderly population. Based on the study, ILO member states and workers' and employers' organizations should be able to review their social protection schemes in order to minimize the hardships of the elderly.
This study is the outcome of efforts by the ILO to address the consequences of the rapid demographic changes predicted for most Asian countries. Given the amount of alarmist writing on population ageing, there was a clear need to take a closer look at available information. The book examines a wide range of concerns regarding the growing number of the elderly in Asia, but the focus is on the topics that are at the core of the ILO's mandate: employment and social protection.
Clearly the ageing of the population results from successes in the overall development process in Asia. Population growth has slowed down, fewer children are born but with a higher chance of survival, and people live longer and healthier lives. However, a number of major issues arising from this positive trend need to be carefully considered as countries 'age'. The social partners should be aware of, anticipate, and develop policies to deal effectively with these issues. The publication provides a starting point in evolving such a strategy.
The study has been prepared under the technical responsibility of Mr. Sjoerd Pieter Hoekstra, Associate Expert on Social Security, ILO/EASMAT. We would like to thank Mr. James H. Schulz, Professor of Economics and Kirstein Professor of Aging Policy, Policy Center on Aging, Heller School, Brandeis University, Waltham, Massachusetts, United States, who drafted the document and shared his ideas and knowledge in his capacity as ILO consultant.
We hope the publication will contribute to a better understanding of the issue of ageing in the region. William R. Simpson Director ILO East Asia Multidisciplinary Advisory Team (ILO/EASMAT)
Bangkok
February 1997
Abbreviations
ASEAN Association of South-East Asian Nations
AWPS Agriculture Workers' Pension Scheme, Kerala, India
ESCAP United Nations Economic and Social Commission for Asia and the Pacific KDPS Kerala Destitute Pension Scheme, India WHO World Health Organization
The population profile of the world in the future poses a daunting problem to many people today. The world of many children, short lifespans, and little time for leisure and recreation is disappearing. In its place is a new world of fewer children, longer lifespans, and a more relaxed retirement. This is generally characterized as the 'ageing of populations'.
Described this way, however, the new world does not seem to be too alarming. In fact, Kerschner mentions " ... in recent years ... the ageing of the world has been viewed by many as a reason for celebration. Global aging is widely heralded as the public health success story of the 20th century."(1) Increasing numbers of people born throughout the world will survive the childhood diseases and disabilities that ravaged their predecessors. They can look forward to life expectancies that no one dreamed about centuries ago. And they can expect to live long enough to reach a period of life when the demands of full-time work can give way to the leisure and retirement opportunities of what are often called the 'golden years'.
But both individuals and governments are very worried. Individuals know that even in relatively prosperous countries older people all too frequently face age prejudice, a waste of their experience and productive capacity, poverty, and loneliness. And governments today fear the potential breakdown of traditional support networks and the rising costs of pensions and health care as populations grow older. For example, a recent report by the World Bank is called Averting the old age crisis: Policies to protect the old and promote growth.(2)
Certainly, important demographic changes associated with ageing (and other age-related changes) are taking place all over the world. Whether they are likely to create crises in many countries is a matter of dispute. Publications on the matter tend to be long on rhetoric but short on data analysis. There are never-ending presentations of basic demographic data since a large amount of such data is available for almost all countries. The data provide details of the composition of national populations and how they are evolving over time. But in trying to interpret future trends, very little information can be found that directly addresses socioeconomic ageing issues arising throughout the world. This dearth of information is especially severe for developing countries.
The situation for Asia is no exception. Almost every publication on ageing begins with a review of demographic data. Little else in the way of empirical information is presented, especially in terms of comparative data (except for a few studies for some countries). Even in-depth studies of particular countries are few and far between.
Ignoring this lack of data, writers continue to describe the crisis that they think will soon confront many countries of the world as they struggle with problems of population ageing. Their assertions are based primarily on projected ratios of older persons to the working population - a measure that has little economic content (measuring the proportion of people, not economic data like production and economic output, or its distribution among various groups in the population).
This publication does not attempt to address comprehensively the potential 'burden of an ageing population' that is currently the subject of considerable debate. Rather, it focuses on the changing characteristics of the ageing situation emerging in Asia and presents the major issues that need to be carefully considered as countries 'age'.
The issues, problems, and challenges are many, but future prospects do not seem as bleak as they are made to appear. As pointed out by Susanne and James Paul in Humanity comes of age:(3)
"The future need not be a cruel struggle for limited resources as pessimists predict. Greater human dignity and social development are attainable in the years ahead, especially if all can contribute to the process. But that transition will not be easy or automatic. Great population shifts will require new approaches to employment, housing, health care, income support and social services. We need
to consider how decent lives can be constructed with and for older persons under these new conditions, especially in the poorest countries where resources will be scarcest. Long life must be reinvented to overcome illness, poverty, powerlessness, loneliness and isolation, to become an affirmation of human experience."
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The ageing of populations(4) is now a global phenomenon: manifest in several parts of the world, incipient in the rest. In demographic terms, the population
is said to be ageing when the proportion of people in the older age range increases, and the share of children and youth decreases, resulting in an ascending median age. In 1950, there were about 200 million persons aged 60 and over in the world, constituting 8.1 per cent of the total global population. By the year 2050, there will be a ninefold increase; the world's elderly population is projected to be 1.8 billion people, about 20 per cent of the total 9.8 billion people (figure 1, page 5). The median age of the world population will jump from 23.5 years in 1950 to 36.2 years in 2050 (figure 2, page 6).
Populations age in two ways: as a result of changes at the base of the age pyramid or at its apex. When the proportion of older persons increases as a result of a decline in fertility, there is a commensurate decrease in the proportion of young persons; this is ageing at the base of the age pyramid. Changes at the apex of the age pyramid occur with lower mortality rates among older persons. Thus, demographic transition begins when there is a secular change from a regime of high fertility and mortality to one of low fertility and mortality.
Irrespective of the pace of change, the demographic transition seems inevitable. The population dynamics of different countries and regions have their own particular idiosyncrasies, but all their age structures have been following, and are projected to follow, the course of demographic transition. Thus, in the developed regions of the world, the transition has already taken place. Very low levels of fertility and mortality have occurred. The resulting populations are considerably older than in other parts of the world and are projected to become even older.
Figure 1. World population, 1950-2050
Of the developing regions, many countries in Asia and Latin America and the Caribbean are now in the midst of demographic transition. In the 1950s and 1960s, the age structures of a majority of these countries became younger. Then, in the early 1970s, the impact of a substantial fertility decline reversed the trend. Since then their populations have been ageing rapidly and the trend is projected to become stronger.
.
In 1950, there were about 200 million people above 60 years of age in the world, evenly distributed between developed and developing regions. By 1975, there were about 340 million elderly people with a similar distribution. Projections, however, indicate that a definite change in pattern is occurring. By 2000, the total world elderly population will be about 600 million, with about two-thirds living in developing regions.
Figure 2. Median age in Asia and the world, 1950-2050
In 2025, the absolute number of the elderly will double to about 1.2 billion. A large majority of them - 72 per cent - will be living in developing regions. Thus, in the 75 years between 1950 and 2025, the elderly population of the world is projected to grow sixfold - double that of the total world population, which will only have tripled by that time. Within this wide demographic picture there are three important trends which have major policy implications: the increasing dependency ratios of youth and the elderly; the growing proportion of the very old; and the larger number of older women compared with older men.
The aged in Asia and other regions
The regional distribution of the population aged 60 and over reflects the growing tendency of the world's elderly to be concentrated in developing regions. The proportion of the world's ageing population was evenly distributed between developing and developed regions from 1950 to 1975 (figure 3, page 7).
Figure 3. Population over 60 years of age, by region, 1950-2030
By 2025, as indicated above, 72 per cent of the elderly - about 858 million people - are projected to be living in developing regions. Disaggregating these data further reveals the trend more clearly. If 1985 and 2025 are taken as two years of reference to consider the proportions of the total elderly population in different regions, it will be seen that Asia had 28 per cent of the total in 1985 but the proportion will increase to 58 per cent in 2025. Comparative figures for other regions are: Europe, 25 and 12 per cent; North America remains 7 per cent; Latin America and the Caribbean, 6 and 8 per cent; Africa, 6 and 8 per cent; Oceania, less than 1 per cent (figure 4, page 8). In terms of proportions of the whole, therefore, developed regions will have less of the world's elderly, with an actual decline in Europe. Developing regions, by contrast, will have an increasing share of the world's elderly, with proportional increases in Asia, Latin America and the Caribbean, and Africa. Table 1 (page 9) shows the proportion that older age groups represent of the total population in various Asian countries in 1990. The proportion aged 65 and over varies from a high of about 12 per cent in Japan to a low of 3 per cent in Bangladesh and Indonesia. Figure 4. Proportion of population over 60 years of age, by region, 1985 and 2025 
| Total population
All ages |
Per cent | |||
| Country | (millions) | 65+ | 75+ | 80+ |
| Bangladesh | 114 | 3.0 | 0.7 | 0.2 |
| China | 1,134 | 5.8 | 1.8 | 0.8 |
| India | 853 | 3.7 | 1.0 | 0.4 |
| Indonesia | 189 | 3.0 | 0.7 | 0.2 |
| Japan | 124 | 11.8 | 4.8 | 2.4 |
| Korea, Rep. of | 43 | 4.8 | 1.4 | 0.6 |
| Malaysia | 18 | 3.7 | 1.1 | 0.4 |
| Pakistan | 115 | 4.0 | 1.1 | 0.4 |
| Philippines | 64 | 3.6 | 1.1 | 0.4 |
| Singapore | 3 | 5.8 | 2.1 | 0.9 |
| Sri Lanka | 17 | 5.2 | 1.7 | 0.7 |
| Thailand | 56 | 4.0 | 1.3 | 0.6 |
Source: Based on data in U.S. Bureau of the Census: An Aging World II, International Population Reports P95/82-3 (Washington, DC, U.S. Government Printing Office, 1993), Appendix table 1.
Further disaggregation of these global data helps explain this changing ratio. In 1950, youth dependency ratios were 43 per cent for developed regions and 65 per cent for developing ones. By 2025, they will decline to 28 and 39 per cent respectively. On the other hand, in 1950, aged dependency ratios were 12 per cent for developed regions and 7 per cent for developing ones; they will increase in 2025 to 30 and 12 per cent respectively. The net result will be a small rise in the total dependency ratio for developed regions (from 55 to 58 per cent) and a big decline in the total dependency ratio for developing ones (from 72 to 51 per cent).
Growth rates of the 80-plus age group will be more rapid in developing regions. In 1950, there were only 15 million very old persons in these regions. By 2025, there will be about 79 million - growing fifteen times, compared with eight times for the elderly population as a whole. In developed regions, too, the numbers of the very old will increase: from 8 million in 1950 to about 58 million by 2025 - growing seven times, in contrast to the total elderly population, which will grow only three and a half times. Thus, in both developed and developing regions, the 80-plus age group will grow twice as fast as the 60-plus age group.
Sex differences in absolute increments are more apparent at older ages. Thus, over the same period, projected increases in the number of persons aged 80 and above are 8 million for males and 14 million for females in developed regions and 24 million for males and 35 million for females in developing ones. Table 2 (page 12) shows the sex ratios for three age groups in selected Asian countries in 1990 and 2025.
Implications of demographic shifts
The major implications of the demographic changes now occurring are clear. First, it is important to recognize that the ageing of populations is inevitable all over the world. Second, projections indicate that the demographic transition will proceed much more rapidly in countries today than it did in the countries that have already experienced it. The recent and continuing fertility decline in many countries with rapidly ageing populations is much faster than the gradual decline experienced by industrialized Western countries in the past.
One major conclusion is inescapable: every country in the world must plan for the ageing of its population, involving very large numbers of people. Moreover, the ageing phenomenon in most cases will occur very rapidly - much faster than in countries that have experienced 'ageing' before.
Table 2. Sex ratios (male:female) for selected age groups and Asian countries, 1990 and 2025
| 1990 | 2025 | |||||
| Country | 25-49 | 65-69 | 80+ | 25-49 | 65-69 | 80+ |
| Bangladesh | 108 | 115 | 189 | 105 | 100 | 102 |
| China | 108 | 98 | 56 | 105 | 99 | 66 |
| India | 109 | 101 | 117 | 106 | 97 | 84 |
| Indonesia | 100 | 84 | 67 | 101 | 87 | 57 |
| Japan | 101 | 73 | 53 | 105 | 95 | 61 |
| Korea, Rep. of | 105 | 71 | 34 | 101 | 86 | 50 |
| Malaysia | 97 | 85 | 72 | 102 | 80 | 54 |
| Pakistan | 103 | 109 | 105 | 105 | 91 | 72 |
| Philippines | 95 | 88 | 106 | 100 | 80 | 86 |
| Singapore | 104 | 97 | 61 | 106 | 95 | 63 |
| Sri Lanka | 95 | 104 | 101 | 102 | 79 | 60 |
| Thailand | 103 | 88 | 54 | 102 | 95 | 66 |
Source: Based on data in U.S. Bureau of the Census: An Aging World II, International Population Reports P95/82-3 (Washington, DC, U.S. Government Printing Office, 1993), Appendix table 6.
Until recently, ageing was usually regarded as a set of issues to be confronted only by developed countries. In the future this will not be true. Ageing is now a global problem affecting developing countries as well. The central policy implication, therefore, is that developing regions of the world will have to plan for the increasingly rapid ageing of their populations at the same time as they struggle with the economic growth challenges of the shift from an agrarian environment to more urban and industrial environments.
The aged in Asia today
Who are the nearly 300 million older people in Asia aged 60 and above? How do they spend their time? Where do they live? How do they meet their special needs? What are their problems?
There are no simple answers to such questions. The heterogeneity of the aged as a group is immense. Older people are but one age segment of the diverse and complex mosaic of people around the world and, thus, as diverse as other age groups. To try to answer these questions for one region - or even one country - presents innumerable difficulties.
Given below are generalizations about the daily lives of older people. This task is difficult not just because of their great heterogeneity, but also because of the huge gaps in current knowledge. Despite the fact that gerontological research has increased greatly over the past three decades, some of the most basic facts about the lives of the elderly in most countries, especially in developing ones, are still not known. This means that the discussion that follows is based more on perception than scientific analysis. Moreover, it is limited to three key aspects of older people's lives: health, living situation, and economic activities.
Kinsella states that cross-national studies of the elderly in developed countries illustrate " ... the large extent to which indications of health and well-being are similar among older populations of different nations".(5) The studies reveal that a majority of the elderly were in good health, with no significant mental or physical decline. About 8 per cent were seriously impaired or dependent on extensive supportive care, with 4-6 per cent living in institutional settings.
There is much less information about the health status of the elderly in developing countries. A World Health Organization (WHO) survey of older people in Fiji, the Republic of Korea, Malaysia, and the Philippines, however, provides us with some important insights.(6) For example, as in developed countries, a very large proportion of the elderly in these four countries reported that 'they feel healthy':
Fiji 58%
Korea, Rep. of 50%
Malaysia 72%
Philippines 84%
Similarly, an Association of South-East Asian Nations (ASEAN) ageing survey in five countries in 1986 found high percentages reporting 'good health' or 'very good health':(7)
60 years old and over
Married Not married
Indonesia 67% 62%
Malaysia 72% 61%
Philippines 41% 28%
Singapore 71% 61%
Thailand 38% 31%
In the WHO survey, when the elderly were asked about their ability to carry out activities of daily living (eating, dressing, walking, bathing, shopping, financial management), most of them responded that they were able to perform all the activities without help from others:
Fiji 82%
Korea, Rep. of 71%
Malaysia 90%
Philippines 91%
However, in all the countries older people reported a significant number of chronic health problems, especially those related to vision and teeth. A study of urban people aged 60 and over in nine provinces of China, for example, found that 59 per cent of them have at least one kind of chronic disease - mainly hypertension, chronic bronchitis, coronary heart disease, and rheumatic arthritis.(8) Many of the older people interviewed reported difficulty in walking long distances. In the ASEAN survey for the Philippines and Thailand, rheumatism was identified as a serious problem among people aged 60 and older (19 per cent in the Philippines and 75 per cent in Thailand).(9)
Meyers and Maggi argue that demographic ageing in developing countries of Asia and in other parts of the world is responsible for an emerging crisis in health care.(10) They point out that the ageing phenomenon causes significant shifts in predominant disease patterns and also creates new demands on health systems that are typically overburdened before new needs arise. They maintain: "In the developing regions, for example, the prevalence of chronic illnesses will soon surpass that of acute, largely infectious diseases. Thus, the demographic transition is primarily responsible for the crises in health care that are emerging in the developing world."
The nature of housing arrangements of older people varies widely throughout the world. Often the arrangements are very poor. Kinsella observes:
"Three important conclusions emerge from a cross-national comparison of living arrangements of the elderly. First, women in developed countries are more likely to live alone as they age, whereas men are likely to live in family settings. Second, both elderly men and women in developing countries usually live with adult children. Third, the use of nonfamily institutions for care of the frail elderly varies widely around the world."(11)
The proportion of the elderly living in independent or separate housing units is relatively high in Scandinavia and the English-speaking countries. Thus, for example, in Australia, the United Kingdom, and the United States, as Kendig points out: "Approximately 95 per cent of older people live outside institutional settings. Only 10 to 20 per cent live in households headed by adult children or others besides a spouse."(12)
The situation is very different in developing countries. The majority of living and care arrangements for older people are tied to living situations involving younger relatives. This is certainly true in Asia. Survey data for four Asian countries show, for example, the following proportions of older people living in households with relatives (other than just a spouse):(13)
Indonesia 76%
Malaysia 82%
Philippines 92%
Singapore 81%
Data for six Asian countries also reveal the small proportion of older people who live alone:(14)
China 3.4%
Indonesia 8.0%
Korea, Rep. of 2.2%
Malaysia 6.4%
Philippines 3.0%
Singapore 2.3%
The WHO survey of the aged in Fiji, the Republic of Korea, Malaysia, and the Philippines provides a variety of information on elderly living environments. For example, survey respondents were asked about their access to water and to cooking, bathing, and toilet facilities. In Fiji and Korea, 13-14 per cent did not have access to fresh water; in Malaysia and Fiji, 6-8 per cent were without adequate toilet facilities; in Korea, 39 per cent lived in housing that did not have cooking facilities and 69 per cent did not have access to adequate bathing facilities.(15)
Many people think that the elderly do not work. They are stereotyped as frail, inactive, and retired. In developing countries this is certainly not the case; formal labour force participation rates are relatively high in most countries.
Regionally, the highest male labour force participation rates are found among the countries of Africa. Data compiled by the ILO for 151 countries and territories show, for example, that 31 of the 36 countries with male participation rates of over 70 per cent for persons aged 65 or older were in Africa.(16) "By far the lowest labour force participation rates for older men prevail in Western Europe where the average is 6.6 per cent." (17)
Labour force participation rates for older women are generally much lower than for older men. The lowest rates tend to be in Islamic and European countries. The ILO data indicate that the participation rate of women aged 65 or over was 10 per cent or less in 83 of the 151 countries/territories; in only 25 countries was it greater than 33 per cent.(18) Regional summary data for persons aged 55 and over are available from the ILO for the year 1990, as shown in table 3 (page 19). The level of participation for persons aged 55 and more in Asia ranks second only to the African region. Table 4 (page 20) provides information on participation in a number of Asian countries in 1980-89.
Moreover, in reviewing economic activities in the formal labour sector only, many of the other economic activities carried out by older people (especially women) can be overlooked. Work associated with the home (cooking, water collection, cleaning, child care, repairs) is a major responsibility that does not stop when people get old. Data from a study in rural Botswana, for example, measures the proportion of time devoted to various activities on a particular day.(19) The data show that there was no dramatic decline with age in work activity among older persons; men aged 60 and more still spent, on average, 33 per cent of their time 'working' and older females spent 40 per cent of their time at work (in contrast to 37-41 per cent for men and 51-52 per cent for women aged 40-59). Moreover, in developing countries, where shared living arrangements still predominate, 'retired' elderly members of the family often take major or primary responsibility for the home, cooking, and child care, while younger adults work outside the home.
In addition to the regular work at home, there is a special aspect of family work that is closely associated with the lives of older people. Although many of them are generally healthy, older age brings a growing probability of illness and incapacity, and the need for health care. Older couples usually redistribute domestic and other chores if there is a deterioration in health of one or both partners. The bulk of caregiving to older people comes, first, from a spouse and, second, from children.(20) Given the high costs of
Table 3. Economically active population aged 55 and over in selected regions, 1990 (Percentage of total projected population aged 55 and over)
| Region | Both sexes | Male | Female |
| Africa | 51 | 73 | 31 |
| Asia | 39 | 63 | 16 |
| Latin America | 32 | 56 | 12 |
| North America | 29 | 41 | 19 |
| Europe | 23 | 37 | 13 |
| [Former] USSR | 18 | 35 | 8 |
Source: United Nations. The world ageing situation 1991 (New York, 1991). Based on ILO: Economically active population estimates and projections, 1950-2025, Vol. V (Geneva, 1986).
caregiving through professional health- and home-care providers, this type of informal family care represents a very significant amount of economic activity.
In summary, while more and more older people are entering a retirement stage of life and at an increasingly early age, it does not follow that the aged in Asia can be characterized as an economically inactive group. The elderly who spend most of their time in leisure activities are still a minority in the world. Their formal labour force activities remain high in many countries, and informal economic activities within the family and community are significant in all countries.
Table 4. Labour force participation rates for selected age groups (%) and Asian countries, 1980-89
| Male | Female | |||||
| Country | 55-59 | 60-64 | 65+ | 55-59 | 60-64 | 65+ |
| Bangladesh (1986) | 98 | 93 | 70 | 10 | 9 | 11 |
| China (1982) | 83 | 64 | 30 | 33 | 17 | 5 |
| India (1981) | NA | 65 | NA | NA | 14 | NA |
| Indonesia (1988) | 89 | 79 | 56 | 56 | 46 | 25 |
| Japan (1989) | 92 | 71 | 36 | 52 | 39 | 16 |
| Korea, Rep. of (1989) | 82 | 66 | 39 | 53 | 42 | 18 |
| Malaysia (1980) | 78 | 70 | 50 | 33 | 27 | 19 |
| Pakistan (1989) | 91 | 81 | 56 | 11 | 9 | 2 |
| Philippines (1989) | 89 | NA | 59 | 51 | NA | 29 |
| Singapore (1989) | 67 | 48 | 21 | 19 | 11 | 5 |
| Sri Lanka (1981) | 74 | 57 | 36 | 13 | 7 | 4 |
| Thailand (1980) | 84 | 68 | 39 | 59 | 43 | 19 |
NA= Not Available
Source: Based on data in U.S. Bureau of the Census: An Aging World II, International Population Reports P95/82-3 (Washington, DC, U.S. Government Printing Office, 1993), Appendix table 1.
Ageing and developments in social protection in Asia
Ageing in the context of social and economic change
Almost all countries in the world have been engaged in the challenging task of improving the welfare of their citizens through economic growth. But today the key to economic growth is still poorly understood and strongly debated. Early in the debate the American economic historian Walt W. Rostow characterized the sweep of development history in The stages of economic growth: A non-communist manifesto. He discussed five stages, with nations moving from 'traditional societies' through three other stages to 'the age of high mass consumption'.(21) According to him, it was necessary for countries that had not already achieved the final stage of development to follow appropriate private and public policies that would help them 'take-off into self-sustaining growth'.
While the key factors contributing to economic growth are debatable, there is no dispute about the fact that many nations of the world have managed to move to higher stages and demonstrated an ability to sustain higher levels of economic welfare through industrialization. In no part of the world is this better illustrated than in Asia. Beginning with the prime example of Japan's spectacular economic recovery in the decades after the Second World War, a number of Asian countries, like the Western industrialized countries that preceded them, have achieved substantial economic growth and have high expectations for the future.
Development and population ageing are connected
It is important to see that economic development - in both the less and more successful countries - is intimately connected to the phenomenon of population ageing and the many related issues that arise. The population ageing phenomenon discussed in Part 2 is a direct result of the social and development history of past decades. Economic growth arising from industrialization, together with the medical and public health advances of the twentieth century, has produced a powerful and inevitable shift in the population structure.
Writing in the eighteenth century, Malthus was concerned that population growth might outstrip food production. He warned that increased production would encourage more births. According to him, if economic growth took place without limiting population growth, a country would soon be faced with the limits of its natural resources, resulting in misery for the population.
Fortunately Malthus was wrong about the 'population response' to improved income and wealth. In reality, what is seen in country after country is economic growth accompanied by fertility that has fallen, often dramatically. Simultaneously, medical advances have extended life expectancy, especially at younger ages, but also to a more limited extent during the later years.(22) The end result is that population ageing today is closely associated with the economic growth of the past. Countries with higher per capita incomes tend to have older demographic structures.
But demographic change is not the only ageing trend seen in Asian and other countries in the world. Of particular importance are trends toward earlier retirement ages, nuclear families, and collective income provision in old age.
In 1970, 32 per cent of men aged 65 and older in Singapore were part of the regular labour force. By 1989, the percentage had dropped to 21 per cent. Table 4 (page 20) shows changes in labour force participation in Asian countries where data are available. In most of these countries, as in countries all over the world, the trend has been toward less participation in the later years.
As people grow older, two very important changes occur with regard to work and remuneration. First, their access to work, and hence remuneration, becomes less secure. Most people aged 25-50 are working or actively looking for jobs and able to find some sort of work. Many have a high measure of job security. For example, labour force participation for men of these ages in 1989 in Asia ranged from 94 per cent for the Republic of Korea to 99 per cent for Bangladesh.(23)
The fact remains that there is a significant labour turnover among older workers in most countries - and once unemployed a very high proportion of them face major re-employment problems. In addition, a wide array of other difficulties arise as they become older: physiological decline; increased incidence of illness and disability; skill obsolescence; age discrimination; reduced functioning resulting from the cumulative impact of workplace and environmental hazards; and geographical constraints on mobility.
The second change, as people grow older, is that there is a decreased expectation, in many countries, that such individuals should work. Attitudes, norms, regulations, and laws related to the matter vary widely from country to country and have changed dramatically over time in many countries. But at some period in the latter part of their lifecycle individuals may be given a choice: whether to continue working in their traditional jobs or retire.
For some of the elderly, however, the retirement decision involves little individual choice. Instead, it is virtually mandatory, determined by a variety of factors largely or entirely outside their control. Factors such as government policies and laws, traditional work practices, employment opportunities, employer policies, and the state of worker health often dominate the retirement decision.
While labour force participation rates for older men have been declining around the world, especially in industrialized countries, trends for older women are much more mixed.(24) One generally finds increases in female participation at ages 60-64 and small declines after the age of 64.(25)
Initially the major reason for lower participation rates of the elderly in developed countries arose from economic growth associated with industrialization. Economic growth permits not only rising living standards in terms of goods and services but also opportunities for more leisure. The great appeal of more leisure is another major reason why formal 'retirement' has come to be a widely accepted practice all over the world. Public and private pensions are, in part, an institutional response to the growing interest in increasing the period of retirement. Pensions allow people to make major shifts in the use of their time, while assuring a source of income to meet daily consumption needs. Thus, social insurance and employer-sponsored pension programmes, liberalized over past decades, have given many older workers a meaningful option of staying on the job or retiring.
Another important reason for declining participation rates of the elderly, especially in many developed countries, relates to the chronic problem of unemployment. With industrialization and a market-oriented economy come periodic recessions and depressions. These have had a marked influence on the formulation of personnel and pension policies. Cyclical economic instability and production shifts should be seen as key factors in understanding most older worker employment policies and the dramatic institutional changes affecting work incentives that have taken place. For example, in many countries both public and private pensions have been deliberately and systematically designed to encourage increasingly early retirement among older workers.(26)
While in most developing countries economic activity rates decline with age, they rarely reach the low levels currently seen in industrialized ones. The majority of the labour force in developing countries is still in rural areas and most workers are still not eligible for pensions. As such there are no opportunities or retirement incentives for most elderly workers to move out of the labour force. The lack of income options, in fact, forces many to continue working as long as possible. For example, in the Philippines, 73 per cent of men aged 60 and older were in the labour force in rural areas, compared with only 36 per cent in urban areas.(27)
Yet male labour force participation for older workers in most Asian countries is declining. As industrialization expands in many countries, this trend of lower participation is expected to continue, perhaps at an accelerated pace.
In 1986, Concepcion wrote:
"Most of the Asian societies have maintained a rather strong family system despite the eroding effects of urbanization ... These societies acknowledge the care of their elderly parents as both a duty and a privilege and consider the neglect or abandonment of parents to the care of strangers as a family disgrace ... However, extensive urbanization and industrialization combined with considerable numbers of the offspring of the elderly moving away to other areas in search of employment will pose problems for elderly care in the coming years. It is, therefore, important that Asian societies begin planning early for these anticipated changes and consider alternatives for the care of the aged."(28)
Certainly, the 'extended family' and the traditional roles associated with it still dominate throughout Asia. At the same time, important changes have been taking place, many of them representing significant departures from the past.(29) There have been increases in nuclear families and changes in relationships among family members (between husbands, wives, children, and grandparents) in both extended family and nuclear family situations.
Perhaps the most dramatic change taking place is with regard to the roles of women. Traditional roles for women have been supplemented or supplanted by the increased participation of women in the paid labour force. Experts repeatedly point to the greater education, employment, and earned incomes of Asian women, and to changes in family size, well-being, roles, and old-age support mechanisms. Given the trends, it is important to point out that there is no such thing as 'the Asian family' - traditional or non-traditional.(30) For many, the family household is the main workplace; for others, their workplace is the growing number of new businesses arising out of industrialization.
"It is when the `sharing group' becomes too small to ensure that there will always be enough producers in it to support the unproductive that devices for insurance become necessary. When the `sharing group' is small there is always a danger that sheer accident will bring the proportion of earners to nonearners to a level at which the group cannot function."(31)
History tells again and again of the inability of families to deal with recurrent social welfare problems resulting from regional food shortages, pestilence, forced migration, wars, rampant inflation, recessions, depressions, ethnic conflicts, political instability, etc.
But this is not the only or most important reason for action outside the family. In industrializing countries, the basic nature of work changes and creates new ways for people to generate income. Cockburn writes:
"Workers become dependent on a money wage and leave behind the former means of subsistence and support within the village or tribe. When the wage is interrupted, through sickness or accident, old age or invalidity, the means of livelihood disappears. In the early stages after the transition from the country to the town, the victims of 'social accidents' may look to the traditional protection of the extended family and the village community, but the ties quickly weaken."(33)
The shift of people away from farming and other types of self-employment complements the rise in labour markets. Increasing numbers of people can no longer directly exchange their labour or other assets for the necessities and pleasures of life. Instead, they must enter labour markets, offer their energies and intelligence for money, and exchange that money for the goods and services they desire. Thus, a great potential for economic insecurity is created as development proceeds. Without other resources, Lindblom states, people become "... vulnerable to coercion when jobs are scarce and insecure to the degree that jobs may become scarce".(34) Older workers become especially vulnerable (as mentioned above) since they are often viewed by employers as no longer of great value to the production process.
Political support for social protection is growing and remains strong today. This support is not limited to industrialized countries; many Asian countries are actively adopting new or improved programmes. The result is a clear change in the extent to which families of the future will be relied upon for economic protection in old age.
Thus, while families are still the main source of economic support in old age for the people of Asia, collective schemes of economic security are growing in importance.
In September 1990, Thailand introduced a new social security scheme covering about 2 million workers and their dependants. Disability, health care, sickness and maternity coverage started in 1991; old-age, family, and unemployment programmes are being phased in through 1998.
In June 1991, the State Council of the People's Republic of China issued a Decision on the Reform of the Old-age Pension System that focused on the need to extend pension coverage to all workers, introduce pension contributions by these workers, and establish the legal basis for operation of an old-age pension system. In a complementary move, the State Council authorized the Ministry of Civil Affairs to begin an experimental rural social endowment insurance programme for people in rural areas. And in January 1996, the State Council issued a circular expanding the programme, which currently includes the participation of 50 million farmers.(35)
Legislation to provide for an expanded pension system was introduced in Indonesia in February 1992.
In January 1992, the Philippines extended its social insurance programme to include self-employed farmers and fishermen with earnings above a stipulated minimum. Also, voluntary social security coverage for persons staying at home to care for the household has been introduced. With the consent of the employed spouse, a married person at home can now be voluntarily covered by paying 50 per cent of the working spouse's contribution.
In July 1992, Australia introduced a nationwide Superannuation Guarantee Levy as a way of covering all workers in the private sector with occupational pensions.
Starting in July 1995, the Singapore Central Provident Fund's 'minimum sum' will be raised by S$5,000 yearly until it reaches S$80,000 in 2003.
Approaches to collective economic security
The three main ways by which Asian countries provide collective economic security in old age are through social assistance schemes, provident funds, and social security programmes. All countries have some sort of social assistance schemes for the economically destitute. Some also have social
security programmes, although in practice they are often limited in actual coverage. The majority of them have no social security programme but a provident fund. These three approaches are discussed below:
Unfortunately, little has been written about social assistance programmes around the world, apart from general descriptions of how some of them operate. In Asia, the most information is available for India, which has developed an extensive social assistance network within the country and has tried a number of innovative approaches.
India provides economic and social support to many workers in the formal sector (i.e. the organized, urban workforce) through a national medical care scheme, provident funds, and employer liability schemes. For the poor in both urban and rural areas, however, there is a lack of formal programmes providing systematic, annual protection against economic insecurity during the various stages of life. Thus, if self-help or family support is not available, older people in India (as in other developing countries) are often confronted with the terrible uncertainty of how to survive.
The central and state governments of India are aware of the problem. But in the context of the nation's efforts to develop, more help is often promised in the formal and informal sectors than can actually be provided. As Wadhawan points out: " ... the social security measures ... and public assistance programmes [in India] have been somewhat restrictive, minimal or cosmetic in their impact and approach, circumscribed as they are by a variety of limitations and constraints."(36)
Despite these realities, India has created a variety of innovative income-maintenance programmes that seek to be responsive, in varying degrees, to the need for greater economic security among poor people. With regard to the informal sector, the task has been left primarily to state governments.(37) The destitute elderly are covered by state social assistance programmes specially targeted to their needs.
Two major programmes that illustrate how this issue is being dealt with in India are those of Maharashtra and Kerala states. Maharashtra state has a population of about 70 million, almost two-thirds of which is in the rural sector. The social assistance programme for the destitute elderly provides benefits to those over age 59 (women) or age 64 (men) who have no property or any other significant source of financial support; cannot receive financial support from a spouse, son, or son of a son (aged 18 or older); and have been a resident of Maharashtra state for at least 15 years.(38) At the end of 1987, there were 273,486 recipients in the programme.(39) Benefit levels, however, are very low - too low to provide even the minimal relief for meeting recipients' needs.(40)
In the state of Kerala, the government has created a variety of special social assistance programmes to help poor people. The two most important ones are the Kerala Destitute Pension Scheme (KDPS) and the Agriculture Workers' Pension Scheme (AWPS). The KDPS was established in 1961 to help destitute persons who are elderly, widowed or physically disabled. The AWPS was started in 1980 to provide old-age pension to low-income agricultural labourers.
Social assistance programmes operate in most other states of India. Qualifying ages vary from 55 to 65 years and the qualifying age for women is sometimes lower than for men, as in the state of Maharashtra. Eligibility conditions for each state vary but the 'means test' to assess financial resources is very strict in all of them. Provisions pertaining to the responsibility of relatives have been relaxed in many states over the years and, as Midgley observes: "While distant kin are usually no longer expected to undertake the task of supporting the needy dependants, the obligations on near relations have been maintained."(41)
In 1995, the central government announced the creation of a national social assistance pension scheme which will be financed jointly by the central and state governments. People over 65 years of age who have a low income and no relatives to help them will be entitled to Rs. 75 per month. It is estimated that 10 million old people will benefit from the programme.
The social assistance programmes in India do not completely solve the problem of how to support the destitute elderly but do reflect an explicit recognition of the poverty problems facing older people in every nation. In fact, they go far beyond those in many other developing countries, even the much richer ones.
Normally both employers and workers are required to make regular contributions (typically a percentage of earnings) into special worker accounts which are administered or supervised by government agencies. Usually a lump sum is paid out upon the worker reaching a designated age (most commonly 55 years for men and 50 years for women); or before the worker reaches the designated age, to meet special defined needs (a major illness, buying a home); or upon disability or death of the worker.
As with other defined contribution schemes, the adequacy of provident fund benefits depends on a long contribution period. During the early years of such plans (start-up period), the maximum contribution period for older workers is usually insufficient to allow them to accumulate sizeable amounts. Also, the capacity of provident funds to provide significant economic support in old age has been constrained by the relatively low level of contributions in some countries; by special pay-outs from accounts before old age; by an inability to ensure that lump sum payments are used to provide long-term old age protection; and by very low interest rates (sometimes below the inflation rate) paid by governments managing the funds. With regard to the last concern, Vittas and Skully observe:
"National provident funds are often established as paternalistic institutions and may be subject to considerable political interference. They have the potential to accumulate substantial reserves, which can then be used to fund the government debt, to support 'high capacity' sectors or activities or to acquire stakes in private industry. But if the reserves are not invested wisely, or if contributions are low, the final benefits may be inadequate to meet the retirement needs of members. In national provident funds, the [income] replacement, investment and inflation risks are borne by employees. The solvency and integrity of the funds depend on their real rate of return and their administrative efficiency."(43)
Some provident funds in Asian countries have accumulated considerable assets. In Singapore, assets in 1991 were 76 per cent of GDP. In Malaysia, assets increased from 18 per cent of GDP in 1980 to 41 per cent in 1991.(44)
Critics argue that provident funds are not likely to satisfy the goal of adequately supporting people in old age. This is mainly because a large part of individual accumulations can be drawn out before old age and what remains can be given as a lump sum rather than a lifetime annuity or pension. A World Bank report comments on this issue:
"Most countries with national provident funds allow employees to use part of their balances for housing and other specified purposes, and Singapore now allows limited investments in approved securities. Members are obliged to redeposit the funds with the provident fund if they sell the houses or other investments. This use of funds has a positive effect on home ownership and the housing market but reduces the impact of national provident funds as a source of productive capital investment and retirement income. It is not clear that mandatory saving for housing is justified on efficiency grounds."(45)
When provident funds were instituted, they were seen as a first step in developing a collective means of providing income in retirement. It was expected that these plans would eventually be replaced by old-age pensions. However, once established, provident funds became very popular as a compulsory way of accumulating funds for weddings and housing, by individuals, and for investment capital, by governments. As a result, the trend away from them has been very slow.
Up to now, ageing issues have not been a major concern of most leaders in developing nations for four main reasons. First, pre-industrial societies are predominantly rural societies where the economic and political position of older persons relative to younger ones is generally strong; where families, by both structure and necessity, are supportive of needs in old age; where older people are able to remain economically productive for a greater part of their lifetime; and where much of the population is outside wage-dependent markets. Second, the aged are a small proportion of the total population, given the relatively low life expectancy and high fertility rates, compared with developed nations. Third, government development priorities favour expenditures that invest in the long-term productive potential of the young. And fourth, the elderly are often viewed (probably incorrectly) as impeding development because they are considered more resistant to change and less adaptive 'human capital'.
Paradoxically, while governments in developing countries, until now, have shown little interest in the aged, there has been a great deal of interest in pensions.(46) As in the industrialized West, social security pensions in developing countries were preceded by pensions for military and civilian officials employed by governments. As discussed above, pensions in many of these countries were mainly influenced by retirement schemes designed to cater largely to the needs of expatriate workers. With the needs of expatriates in mind, provident funds were established in many colonies, which impeded the subsequent development of social insurance programmes in most of the nation states created after independence.(47)
A second development in the colonies was the establishment of mutual benefit societies. These societies now exist in countries as diverse as Algeria, Côte d' Ivoire, India, Malaysia, Nigeria, the Philippines, Senegal, Singapore, the United Republic of Tanzania, and Zaire. These were modelled after the European 'friendly societies' in, for example, France, Belgium, and the United Kingdom. Over the years, some of the societies (especially in Latin America) have evolved into or been replaced by pension schemes.(48)
Social insurance pension schemes have now been enacted by governments in many developing countries. A variety of factors have influenced their adoption, ranging from imitation of 'Western practices' to new efforts to deal with the growing economic insecurity among the elderly resulting from industrialization and international market fluctuations. Perhaps, most importantly, the traditional sources of economic insecurity confronting individuals and families (as discussed earlier) have not diminished as these countries progress, creating continuing demands for effective social protection programmes.
While there is no universal agreement on the exact definition of social security, it is commonly defined as having the following attributes:
Table 5 (page 37) shows social security programme characteristics for selected Asian and Pacific countries and territories in 1994. The eligible age for most programmes is 60, with earlier ages for women in China, Pakistan, and Taiwan, China. The number of years of participation required to receive a full benefit varies widely since these programmes are in various stages of maturation. Payroll tax contributions by workers range from zero per cent in Pakistan to 5 per cent in the Marshall Islands, with employer contributions in many cases being higher. In only two countries, the Republic of Korea and the Philippines, are retirement benefits indexed.
Table 5. Characteristics of social security old-age programmes in selected Asian and Pacific countries, 1994
|
Country |
Normal
retirement age |
No. of years'
coverage for full pension |
Payroll tax (%) |
Automatic indexation of benefits | |||
| Women | Men | Worker | Employer | Government | |||
| China | 45-60a | 55-60a | 10 | 3-5 | 15-20 | b | None |
| Korea, Rep. of | 60 | 60 | 20 | 2-3 | 2 | b | Yes |
| Marshall Is. | 55 or 60 | 55 or 60 | 20 | 5 | 5 | 0 | None |
| Micronesia | 60 | 60 | c | 1 | 30 or 38 | 0 | None |
| Pakistan | 55 | 60 | 15 | 0 | 5 | 5 | None |
| Palau | 60 | 60 | c | 4 | 4 | 0 | None |
| Philippines | 60 | 60 | 10 | 3.33 | 4.67 | b | Yes |
| Taiwan, China | 55 | 60 | 1d | 1.3 | 4.55 | 0.65 | None |
| Thailand | (Scheduled to begin during 1998) | ||||||
aVaries depending on occupational status.
bContribution not based on payroll.
cVaries by year of birth.
dEarlier eligibility with 15 years (men at 55) and 25 years (any age).
Source: U.S. Social Security Administration: Social security programs throughout the world -1995 (Washington, DC,
U.S. Government Printing Office, 1995).
Policy issues and options for the aged
How serious are the problems of ageing in Asia? Is there a 'crisis' that demands immediate and extraordinary change?
Parts 1 to 3 presented an overview of the situation and developments in selected countries. Clearly the situation is not static. Changes are occurring, sometimes at a rapid rate. Certainly, important issues related to the ageing of populations and changing situations of older people need to be given attention.
While progress has been made, the reality of ageing populations today will challenge policy makers for many years into the future. Some of the important concerns arising out of contemporary developments are as follows:
Part 4 addresses these issues and their implications for the future, indicating some of the options.
Helping the elderly poor
As mentioned earlier, the majority of the elderly in Asia live with their children. Not surprisingly, children and grandchildren are often the main sources of support for people when they are no longer able to work.(49) Thus, the economic situation of many older people in Asia is intimately tied to the more general situation of the extended family as a whole.
Unfortunately, poverty still exists for a large proportion of the world's population. The United Nations Population Fund has estimated that in 1989, 23 per cent of the world's population lived in absolute poverty.(50) And the number of people in Asia who were estimated to be in poverty was 675 million (25 per cent).
Generalizing broadly, it can be said that the poor are disproportionately in rural areas and primarily engaged in agriculture. But another generalization is equally valid. Around the world, and in Asia, women predominate among those living in poverty. As Todaro points out:
"The poorest segments of Third World populations live in households headed by women, in which there are generally no male wage earners. Women head roughly 20% of households in India, 17% in Costa Rica, and 40% in rural Kenya, and the proportion is rising throughout most of the Third World."(51)
Poverty of the aged mirrors the poverty of nations as a whole, with its rural character and feminine preponderance. Thus, according to HelpAge International:
"The greatest threat to the security and well-being of older women remains the poverty of their society. In many parts of the world, poverty in old age is the last phase in a lifetime of deprivation. Poverty affects both men and women, but for many women their vulnerability in old age is made worse because of the added disadvantage of gender discrimination."(52)
Clearly, one of the best ways to combat poverty in old age is to pursue a successful development programme that raises the general level of national income without creating inappropriate inequalities in the distribution of income and wealth. For women, however, such a programme is not enough. Too often the benefits of economic growth have flowed disproportionately to men. Therefore development policies must explicitly work to expand women's opportunities to receive formal education, obtain formal sector employment, gain access to financial institutions and credit, and receive equal access to food, health care, and government support.
There are other causes of poverty that are especially relevant when people get older. The two most important ones are their declining ability to work, and the death of family members or their geographical separation.
In most societies access to material goods - a major determinant of living standards - is directly related to remuneration/wealth systems associated with work. As indicated earlier, when people grow old, two very important changes occur: their access to work, and hence remuneration, becomes less secure, and societal expectations regarding their work decrease.
At the macro level, there are major forces operating in Asia that are creating new work environments for workers. Today, more than ever, countries are embracing the incentive and control mechanisms of liberalizing markets and, in the process, exposing workers to all the economic insecurity that goes with them. China, for example, is shifting from a system where almost all non-agricultural workers were assigned jobs by an administrative allocation process and were protected by the 'iron rice bowl'. Currently there is a more open system of labour mobility and job choice, and guaranteed lifetime employment has declined dramatically.
Competitive markets - responding to technological change, shifts in consumer preferences, new sources of productive inputs, etc. - threaten firms' profits and workers' jobs if the demands of new production possibilities and economic output needs are ignored. Clearly, with market incentives that promote efficiency, innovation, and growth also come labour dislocation, unemployment, social disruption, and socioeconomic inequality.
These changes do not occur solely in towns and cities. Rural areas also experience drastic changes as product markets shift, as new agricultural practices compete with old ways, and as fertility and ownership of land change. Increased migration, growing dependence on wage income, and fluctuating crop prices affect the welfare of many families, especially the elderly. As summarized by Susanne and James Paul:
"Village life has changed drastically over the past few decades, sweeping away many conditions that gave security and stability to the lives of older people. Many villagers today no longer have free use of a plot of land, or their plot is too small or arid to support them. Growing population, deteriorating environment and specialized agriculture that favours big farmers - these are some of the factors that deprive families of adequate land. Instead of subsistence farming, people must now work for wages, often on a large farm or plantation, raising cash crops like tea or jute, or sugar cane or pineapples. In Bangladesh, half of all rural families are landless - up from one in five just thirty years ago."(53)
Are the answers the same in Asia? Unfortunately, very little information is available on the determinants of exit from the labour force in Asian countries. However, it is unlikely that Asian employers react to older workers any differently than employers in the West. According to The Economist: "The main reason that employers steer clear of older workers is that they suspect them of not being up to the job."(55)
It has long been assumed by most employers worldwide that the productivity of workers tends to diminish with advancing age or at least that it does not keep up with the rise in wages. Until more empirical studies on employer/employee attitudes about work in later life are available, it will be Table 6. Republic of Korea: Labour force status. Persons aged 60 and over (percentage)a
| Large cities | Medium -sized cities | Rural areas | ||||
| Employment status | Male | Female | Male | Female | Male | Female |
| Not in labour force | 62 | 86 | 58 | 79 | 37 | 61 |
| In labour force: | 38 | 14 | 42 | 21 | 63 | 39 |
| Agriculture | 4 | 1 | 14 | 8 | 58 | 34 |
| Other | 34 | 13 | 28 | 13 | 5 | 5 |
a For mid-1980s. Exact year not given.
Source: Ehn Hyun Choe: "Current and future prospects on problems of aging in the Republic of Korea", in U.N. Economic and
Social Commission for Asia and the Pacific: Population aging: Review of emerging issues, Asian Population Studies Series
No. 80 (Bangkok,1987), pp. 44-52.
impossible to assess whether the determinants of work performance among older workers in Asia are indeed different.(56)
The age designated by pension and savings plans for receipt of full benefits, the 'normal retirement age', influences how long people work. Research to date indicates that workers are strongly influenced by the nature of plan rules.
Table 5 (page 37) contains information about social security pension schemes for selected Asian and Pacific countries in 1994. Retirement ages generally range from 55 to 60 and are often lower for women. Established at a time when life expectancy was much lower, these normal retirement ages must now be questioned as to their appropriateness. As life expectancy rises, a constant retirement age results in ever-increasing programme costs, unless specific restrictions are applied.
Japan is a good example of a country that recently has been grappling with this issue. For many years, the fixed age for retirement from large firms was 55. The Government has had a policy, since 1973, of encouraging employers (through 'administrative guidance') to raise the mandatory retirement age. Compliance with the policy is voluntary and often employers have been reported to be resistant to it. In 1986, legislation was enacted that again directed non-complying employers to take action to bring their practices in line with government standards. Gradually firms have been raising the age of mandatory retirement, with both the firms and Government developing an elaborate variety of secondary work options for individuals not yet ready to stop work completely.(57)
Until recently, in Singapore, there was no mandatory retirement age. Tan Boon Chiang writes: "Retirement is normally negotiated and because the industrial relations system is sophisticated sufficiently for formal negotiations, collective bargaining will often result in the provision for retirement at the age of 55. In the public sector it is 60 years."(58) However, confronted with rising life expectancy, the Government passed The Retirement Age Act of 1993, Section 4 of which states: "The retirement age of an employee shall not be less than 60 years or such other age up to 67 years as may be prescribed by the Minister."(59)
It cannot be assumed, however, that there will be a direct trade-off in hiring practices between younger and older workers. Employers can respond in a number of ways. Recruiting and hiring different types of workers (such as older workers) is one way. Employers can also invest in more physical capital that reduces labour needs; or promote the liberalization of immigration policies favouring applicants with needed skills; or encourage more women with children to stay in the labour force by, for example, offering day-care facilities; or shift production processes to countries with labour surpluses and lower wages. Moreover, cyclical and structural unemployment will undoubtedly continue in the years to come, generating political pressure to use older workers as a 'buffer' to moderate the social and economic problems arising from such unemployment.(60)
Countries have tried a variety of mechanisms to make older workers more employable, including skill/job training, job redesign and job creation assistance programmes, flexible work schedules, and improved job search information and procedures.(61) However, an ILO study of efforts and practices in 12 industrialized countries indicates that employers are reluctant to invest resources in older workers, especially when other options are available.(62)
In Asia, where labour surpluses are common, it is unlikely that priority will be given to dealing with the problems faced by older workers. However, some countries are addressing older worker needs. In the Republic of Korea, for example, the Korean Senior Citizens Association, through its various local chapters promotes employment assistance, including job development, job counselling, and job placement.(63)
Poverty: Loss of family support
In all countries of the world the family plays a key role in providing social and economic support for its members. But what happens when there is no family? In the case of the elderly, serious problems often arise when there are no children or other family members to help them in their old age. Poverty frequently results.
Most individuals throughout their lives are integrated into households, families, clans, tribes, and communities. The many supportive roles that family solidarity plays in promoting the economic security and social viability of both individuals and the larger society have been discussed at length in a large body of literature.(64)
When people reach old age they are likely to have spouses and children who are able to assist them in times of need.(65) But the extent of potential support for some may be meagre or even non-existent. Four major events can significantly weaken or eliminate the support traditionally available in old age: death of a spouse, divorce or separation, childlessness, and migration of family members.
Among older people, a large proportion in most countries are 'not married', that is, single, widowed, separated or divorced. The first part of table 7 (page 48) shows this percentage for six Asian countries in the early 1980s. The proportion ranges from 37 per cent in Bangladesh to 64 per cent in Indonesia. On average, nearly half of the aged in both industrialized and developing countries do not currently live with a spouse.
A high proportion of older women are widowed. The second part of table 7 shows, for selected Asian countries, the proportion of aged women who are widows. In the Republic of Korea, for example, 75 per cent of women aged 65 or more are widows. Table 7. 'Not married' older people in Asia (percentage)a
| Country | Aged 'not married'b |
| Bangladesh | 37 |
| India | 48 |
| Indonesia | 64 |
| Japan | 45 |
| Philippines | 40 |
| Singapore | 50 |
| Country | Aged widows |
| India | 10 |
| Indonesia | 64 |
| Japan | 61 |
| Korea, Rep. of | 75 |
| Malaysia | 61 |
| Singapore | 64 |
| Viet Nam | 37c |
a Data are circa 1980 and for people aged 65 and older.
b 'Not married' denotes men and women who are single, widowed, separated or divorced.
c Females aged 55 and over.
Sources: Calculated from data in B.B. Torrey, K. Kinsella, and C.M. Taeuber: An aging world (Washington, DC, U.S. Government Printing Office, 1987), table 6; G.C. Myers: "Cross-national patterns and trends in marital status among the elderly", in Population agées et révolution grise (Louvain, Institut de Démographie, Université Catholique de Louvain, 1990), table 1; and Pham Do Nhat Tan: "Lonely old people and issues encountered in social policy making", in Scientific Bulletin on Labour and Social Affairs (Hanoi, 1994).
Loss of a spouse - as many studies around the world have shown - not only significantly weakens the support network that operates in times of need, it is often also a direct cause of immediate problems for the surviving spouse. For example, as is commonly the case, with the death of the spouse who was earlier working, a major source of income shared by the couple comes to an end. When pension is available, it often stops (or is reduced drastically) as soon as the eligible retired worker dies. In many societies, a woman at marriage often leaves her family of birth to join her husband's family and sometimes finds her status and roles significantly eroded after his death.(66)
Similar problems, sometimes more serious, arise as a result of divorce or separation. Upon divorce, the economic situation, especially for women, is likely to deteriorate. Social relations may also become strained, with social isolation frequently increasing.
Of course, the children of older people are a major source of support in their old age. Even when there is a spouse, and especially if there is none, older
people generally count on assistance from their children in times of need. But the fact remains that many are childless when they reach old age.
There are four main reasons for the childless situation. First, there is the biological infertility that affects some men and women. Second, children may die before their parents as a result of disease, war, famine or accident. Third, some people do not marry or voluntarily choose not to have children. And, fourth, one of the spouses may die before any children are born and remarriage, for some reason, does not take place.
Statistics on childlessness among the elderly are relatively meagre. The evidence available indicates that in developing countries the phenomenon of childlessness, while not widespread, is significant. The earlier-mentioned WHO survey of elderly persons in Fiji, the Republic of Korea, Malaysia, and the Philippines gives some measure of the problem's magnitude.(67) The following percentages of the population aged 60 and over had no living children:
Fiji 4%
Korea, Rep. of 6%
Malaysia 3%
Philippines 5%
The little data available indicate that older people without children are a minority but numerous in both developed and developing countries. Even though they typically constitute a relatively small part of the total population, their existence and vulnerability represent an important policy issue for every country.
Even if older people have children, there is no certainty that they will be available to provide assistance. An important aspect of the issue is also the variety of problems created by migration that result in geographical separation of the elderly from their children. Over the past century, there has been a surge in population movements around the world. The global population in cities more than doubled between 1950 and 1975, in large part accounted for by younger people leaving rural areas.(68) For example, in the early 1970s, there were only 80,000 people living outside their 'home province' of Sichuan, China; today there are about 6 million!(69) Migration in China has soared with the economic reforms of recent decades.
Tout writes of a "migration crisis", the seriousness of which "... may be increased when the emigration is away from the home country altogether. The generations are even more removed in terms of distance, communication, currency, and cultural environment."(70) While many younger migrants send remittances back to their parents, some choose not to do so or, more commonly, are unable to do so, given their own precarious financial situation.(71)
In addition to problems arising out of migration to urban areas and to countries where there are better job prospects, there are the dilemmas associated with natural disasters and political upheavals. Tout observes:
"The first problem to confront the elder in a disaster situation is that he or she may be left behind by the mass migration. When refugees flooded into Sudan from Central Tigray, an Oxfam report estimated that up to 40,000 elderly people had been left behind without adequate support. Most of these old people were incapable of walking for perhaps two months across rough country to reach the 'haven of relief'."(72)
While most children acknowledge an obligation to care for parents in their old age (if needed), the responsibility becomes less clear when there are no children or they do not (or cannot) provide the necessary support. Many Asian countries have laws that legally obligate children to support their parents. Often other relatives help, and sometimes neighbours, charities or community groups assist persons in need. In many countries there are also formal government policies and programmes (such as social assistance) to deal with this issue.
With urbanization, modernization, and international migration on the rise - and fertility in many countries on the decline - there is a growing need for countries to think carefully about policies for those without families. It is not sufficient for policy makers to say that the family will take care of the elderly. Unfortunately, there are many aged without families or receiving inadequate support from their families. The United Nations Economic and Social Commission for Asia and the Pacific's report states the issue this way:
"Cultural traditions in Asia normally provided adequate and sympathetic support to the aged population, but two types of old persons ... [are] particularly vulnerable. The first ... [are] those who had no children or close relatives to care for them. In a context of limited resources and programmes, highest priority at the national and community levels should be accorded to the elderly who are alone. Other vulnerable old persons ...[are] those affected by migration, either because they ... [have] moved or because their children ... [have] migrated away."(73)
Social protection: What mix of programmes?
Social protection in old age can be achieved in a variety of ways. As discussed above, with old age comes a growing possibility that work and work income will no longer be available. Given this reality, individuals have had to develop and rely upon alternative support mechanisms. These include personal savings, family support, mutual benefit societies, public and private social assistance, social insurance occupational pensions, and provident funds. These mechanisms not only respond to threats of lost work capacity, they also create opportunities for individuals to decide on whether they want more leisure in the later years, i.e. voluntary retirement.
Personal savings and economic support from children have long been the most common ways that individuals have dealt with forced or voluntary retirement. Moreover, in developing countries today, these two mechanisms remain the prime sources of economic support in old age.
Individuals attempting to provide for old age through personal savings find themselves involved in highly complex financial decision-making, typically with little available information and a great deal of uncertainty about their key life events. Kotlikoff states that the result is "... inadequate saving and insuring can arise from myopia, misinformation, miscalculation, and simple laziness".(74) As pointed out earlier, the major problem with the family and various group associations in sharing risks is that the number of people involved is often relatively small.
In recent years, social security systems have been the subject of increasing concern in policy discussions. Slow economic growth and worldwide inflation, together with demographic ageing in some countries, have increased the perceived financial burden, both current and future, arising from these programmes. Concerns have also been raised on (a) the impact of social security programmes on savings and labour force participation; (b) problems in developing countries with regard to large groups in the labour force who are still not covered and, hence, denied benefits; and (c) the possibility of inter-generational conflicts arising out of the financial and equity debates in various countries.(75)
In respect of economic development, there is an important debate over the relationship between social security and demographic changes. Developing countries today better understand how development in urban and rural sectors is accompanied by changes in family size and in the effectiveness of social and economic support provided by family members. In countries with population-planning programmes, the question arises as to the extent to which government income-security mechanisms are needed to replace traditional family supports made less viable by rapid demographic change (smaller families, greater geographical separation of family members). There is currently no consensus among development experts on these questions.(76)
The main debate, in almost all countries, is about the importance of social insurance as an income-maintenance mechanism relative to the other options. In developing countries still without any operational collective programme at the national level, the issue is not what to abolish (or coordinate) as in developed countries, but what type of programme to institute.
The major income-maintenance programmes that operate along with and complement social security in most countries are employer-sponsored pensions, mandatory and voluntary savings programmes, and social assistance. Much of the current debate is over whether to shrink the role of social security and expand one or more of these other types of programmes.
Employer-sponsored pensions provide periodic or lump sum payments by employers or unions which take principal responsibility for administering a collective plan for a specific group of employees. These pensions have come under frequent criticism with regard to a variety of issues. The major issues are the need to extend coverage and eligibility beyond current levels (coverage being predominantly of high-wage workers in more prosperous industries); how to reduce the risk of default on promised pension benefits; how to efficiently and equitably 'integrate' private pensions with social insurance provisions; how to deal with problems of appropriate labour mobility and work incentives arising out of pension 'vesting' and retirement/disability provisions; how to structure pension plans so that they treat women fairly, relative to their male counterparts; and how to deal with inflation.(77)
Unlike employer-sponsored pensions, savings incentive programmes seek to encourage or mandate initiative through personal savings. Various types of collective arrangements provide ways for individuals to set aside money in special accounts to be used for specific contingencies, a major one being retirement. In voluntary savings incentive programmes, special tax provisions and employer contributions that supplement the regular contributions of employees are the major mechanisms used to encourage individual participation. In most cases the amounts accumulated in special accounts cannot be withdrawn, without substantial penalties, until a person reaches a specified age. Voluntary savings incentive programmes are criticized as being utilized disproportionately by higher-income individuals. Both voluntary and compulsory programmes usually place the risk of inflation primarily on the individual, often with few options for minimizing the risk through appropriate management of the investment portfolio.
An entirely different approach to providing better income in old age is through social assistance programmes. It has been argued that this approach, in contrast to universal benefit programmes like social security, reduces the costs of public income provision for old age while better targeting such income to those most in need. Social assistance programmes provide cash benefits to individuals who meet specific eligibility criteria associated with defined categories of need. Means tests are typically applied to the income and assets of individuals as one major condition of eligibility.(78)
While both social security and social assistance programmes operate in almost all industrialized countries, there has been a clear shift away from means-tested benefits in most of these countries.(79) In part, the shift is the result of the broad political support generated by universal programmes and the desire, in many countries, to promote social cohesion and national solidarity.
An equally important set of reasons for the shift arises out of the strong opposition to past and current social assistance programmes in various countries. These reasons include the high cost of administration, the stigma related to receiving means-tested benefits, and the abuse of power by those determining eligibility. Such problems have resulted in strong negative reactions to this as the principal approach for dealing with income- maintenance issues. Opposition has been heightened further by both the disincentives to programme participation and loopholes for fraud that typically arise. Finally, many analysts point to the potential for such programmes to decrease work and savings incentives.(80) Despite these drawbacks, social assistance programmes exist in most countries, usually as 'programmes of last resort' to help needy people when other alternatives fail.
In the years to come, increasing numbers of individuals will reach old age either unable to work or with the expectation of more leisure promised by retirement policies and practices. When work stops, where will income support in old age come from?
National income-maintenance policies for the elderly can never be static. Nations are confronted with an evolving demographic structure, fluctuations in economic growth, and pressures arising out of other macroeconomics developments, especially unemployment and inflation. These changing factors all impact on the appropriateness of any particular mix of policies and programmes. Thus, it can be expected that countries will be reassessing options, shifting approaches and the mix of mechanisms, and changing the provisions of particular operational programmes.
Living options: Meeting the needs of changing life circumstances of the aged
It would not be surprising to read this vignette in an article describing the family and living situations of older people in an industrialized country of Western Europe or North America:
"Mr. 'X' is 76 years old. He retired from an oil company more than 10 years ago. His wife died a few years ago, leaving him alone. His four children, all busy with jobs and families of their own, are unable to look after him. As a result, ... [Mr. X] decided to move into a suburban convalescent home, where he has been well cared for."(81)
But the vignette is about Shi Yamin who lives in China. It illustrates the changes occurring in Asia, where increasing numbers of older people are forced to think about alternatives to traditional family living arrangements.
Yet it would be a mistake to view these successful families as operating in isolation and without the support of key community and governmental institutions. In fact, over time, formal institutions have been assisting families and, in some cases, taking over some of their traditional responsibilities. While such developments can be expected to continue, it is important to view them as efforts to supplement and support the family support system, not supplant it.
A major concern arises as the provision of outside assistance increases. There is the fear that too much outside assistance will prove counter-productive, weakening the roles and responsibilities better maintained by the family. Indeed, in Western countries some social policies relating to the elderly have proven dysfunctional, tending to isolate older people from their families. Thus, a major policy issue is to find a proper balance between family and government assistance - help the family to continue to be responsive to the needs of its elderly members, yet provide outside support and care when critically required.
Governments in Asia have made particularly strong policy declarations with regard to the need to assist and maintain traditional family systems to provide support to people when they get old. As Yow-Hwey Hu points out, this view has a powerful appeal. "It promises the most humane living environment, the best care possible (because it comes from one's own blood), care consistent with indigenous values, and all this at the lowest possible cost to society."(83)
Contrast this statement, however, with the views of Tan Boon Chiang:
"As new generations of better-educated and better-trained younger populations grow up with Western ideas and behavior patterns, they have slowly moved away from Asian traditions and cultural concepts towards a more materialistic self-oriented, individualistic way of life. The younger generations can be expected to believe that the state must provide for their economic and social needs ... they view the welfare of the underprivileged, the destitute, the elderly, the sick, and the disabled as the primary responsibility of the state and not theirs ... Where the erosion is becoming obvious, it is imperative that remedial action should be considered without further delay."(84)
Two very divergent views about Asia's future are seen here: attitudes are changing, and it is unclear to what extent traditional values will remain unchanged.
These are not the only concerns, however. Often caregiving by families is severely limited by the very small number of family members available and expected to carry out the duties. Ngan and Wong illustrate the problem in Hong Kong, where a lot of effort has been put into promoting family fealty:
"In Hong Kong, when community care policies were first launched in 1977, responsible policy makers were too optimistic as to the capacity of the family to provide uninterrupted long-term care for its frail dependants. Not a word was mentioned on how to enlarge the caregiving capacity of the family and the community. As a result, the caregiving load falls to a few family caregivers, mostly female. On the other hand, advances in medical sciences have enabled frail elderly people to live longer, but with chronic illnesses, making the caregiving load an increasingly prolonged commitment. With inadequate community support services to facilitate family care, female family caregivers are eventually victimized by the 'caring trap' (Pulling, 1987). It is a trap because caregiving is going to be a long-term commitment, and it is difficult for the caregiver to be emancipated except through the death or institutionalization of the care recipient."(85)
Worse still, a random sample of Chinese families in Hong Kong found that among elderly respondents aged 60 and older, 14 per cent did not have anyone available to help them in times of need.(86)
What Ngan concludes for Hong Kong, based on field studies, is also true in some other Asian countries:
Given the growing strains on families, what should governments do? Many fear that intervention and help from the government will only make matters worse, encouraging families to do less. However, there is strong evidence, from the experience of industrialized countries to date, that government- and employer-sponsored programmes for the elderly have not generally diminished in any significant way the willingness of families to provide economic and social support to older members of the family who are in need. What has changed is that older people are now able to maintain economic independence in old age largely as a result of economic growth and the concurrent development of collective social protection networks, especially social security. Other positive changes are the willingness and ability of the government to assist families.
Who should support the elderly? This is not an either-or question. Government programmes are rarely designed to completely replace traditional kinds of protection. Local communities and occupational groups often develop fairly sophisticated social protection schemes for their members.(88) For example, in Beijing's Tiangiao subdistrict (where residents aged 60 and over represent about 14 per cent of the population), a government office has helped establish a mutual-aid association, currently with 2,000 members. Six specialized community service teams provide services, including repair of household appliances, tailoring, haircutting, and medical care.(89)
In the late 1980s, two centres to help poor older persons without families were created in Seoul, the Republic of Korea.(90) The centres provide counselling, physical and occupational therapy, and recreational facilities, and coordinate home health services using nurses, social workers, and community volunteers. Korea has almost no other provision for publicly supported caregiving for chronically ill or recovering acutely ill elderly (or other disabled) persons with families.(91)
Clearly there is no need to choose between family support, on the one hand, and government action on the other. A combination of self-support, family support, local community assistance, and government action can be complementary and desirable. In Japan, the Government has recently developed The Golden Plan for implementation over the coming years. The plan stresses the need for community-based care, shifting away from overuse of hospitals to care for old people with chronic illnesses and disabilities. Geriatric rehabilitation centres and municipal outpatient facilities are being set up to help families providing care to the frail and disabled. In addition, new housing units, called 'care homes', are being created. They will provide an 'assisted' living option for persons able to function independently in specially equipped housing, with staff available to render various services (cleaning, help with medication).
The mix of family, community, and government action will vary widely from one society to another depending on its economic conditions, political and social structure, and traditions.(92) However, if we accept the proposition (mentioned above) that expansion of government policies and collective programmes (public and private) can effectively supplement and support families in their traditional roles without substantially supplanting them, government action becomes not only appropriate but a necessary part of that mix. Hashimoto observes: "Thus, the question is not one of who should give more support - state or family. It is rather a matter of finding the appropriate mixture of support systems ... "(93) [emphasis added]
The shelter needs of the elderly change over time. While they have strong emotional attachments to their homes, many are confronted with the need to change their housing situation. Often this change arises out of economic necessity. Changes in family situations also create different housing needs, primarily as a result of children leaving to set up separate residences, the migration of family members, or the death of a spouse. In some cases, especially when finances permit, older persons may opt for special 'retirement housing' that allows them better leisure opportunities. Frequently, however, the need to change their homes arises from changes in individuals' mental or physical capacity.
The housing needs of older people change in the context of broader housing issues. It is rare to find a country where there are no serious shortages in adequate housing for the population as a whole. Inevitably, the special housing needs of the elderly compete for scarce resources with the needs of others in the country. Countries must decide on the extent to which they can respond to the changing and very real housing needs of older persons.
The proportion of older people living in independent or separate housing units is relatively high in developed countries. In developing countries (as mentioned earlier), joint living arrangements predominate. Studies of housing patterns among the elderly find, not surprisingly, that the basic tendency among older people in both developed and developing countries is to 'remain in place'.(94) Older people do not like to move, resulting in fewer shifts in living accommodation among them than among younger age cohorts.
It is now well known, through research, that most of the elderly desire to avoid long-term placement in institutions (hospitals, nursing homes, old-age homes). Less well known is the fact that families also desire to keep their older parents and grandparents out of these institutions. This is true in both developed and developing countries.
The result is that only a small minority of elderly persons live in institutional care facilities. Most live independently or with relatives. They prefer not to live in institutions, the high cost of which also discourages their use unless absolutely necessary.
There is no question that there is a growing need for institutional facilities. Sometimes an older person's health is such that a family cannot provide the necessary care despite its good intentions. Or there is no family available to provide care. In the worst cases, families abandon their relatives.
A WHO seminar of health experts from sixteen Western Pacific countries and areas in the region recommended that action be taken to provide care to the elderly when families could no longer cope or were unavailable. According to the seminar report:
"The emergent need for some basic provision of institutional care is now evident in most countries in the region. The seminar identified the need for governments to take account of this trend to enact legislation and regulations to ensure good quality, appropriate, equitable, and cost-efficient provision of institutional services whether by the government, nongovernmental organizations or the private sector."(95)
In addition to nursing homes, there is now a wide variety of non-institutional housing explicitly designed or designated to serve the elderly. New types of housing that have been developed in the West include retirement villages or communities, life-care communities, sheltered or collective housing, 'granny flats' (part of a house turned into a self-contained unit for an elderly relative), foster homes, shared housing, and group homes. Clearly, choices and options can be developed; it is important for each country to consider and act on housing policies appropriate to its particular national situation.
There is little controversy over the need for specialized institutions (such as nursing homes) for the elderly who require extensive assistance but do not have relatives to care for them, or for the elderly who are seriously ill and need special medical care. Most people would agree with promoting inter- generational family living arrangements that strengthen reciprocal support mechanisms and provide care to older persons when they become ill, physically incapacitated or economically vulnerable. Rather, much of the controversy arises over whether independent living arrangements that provide alternatives to family care should be promoted and, more generally, whether age-segregated facilities are in the long-term interests of the aged and society.
Lawton, relying heavily on research carried out in the United States, writes:
"Past studies have shown that clear social gains have been associated with age homogeneity. And recent research shows that while the majority of elderly people do not wish to live in age-segregated housing, a substantial minority (about one-third) prefer to live exclusively with other elderly people."(96)
Moreover, studies show that those who choose this lifestyle in the later years tend to increase their circle of friends, have better relationships with their families, and have an improved self-image. In contrast to integrated settings, where the standards and expectations of younger people tend to prevail, homogeneous settings promote the emergence of a distinctive set of norms that are more relevant and appropriate to the elderly.
However, a shift to any new living situation can be emotionally and physically debilitating. Moving to special housing for older people, moreover, is likely to require a major shift in geographical location away from their community and longtime friends. Often special housing, especially large complexes, are situated in isolated areas, their location dictated by financial constraints and the availability of existing buildings or land for the purpose.
Moreover, some critics of age-segregated housing argue that it promotes isolation from the broader community and encourages dependency among the elderly. As Lawton points out, where support services are provided:
"... the more competent may become reduced to the point where their skills are not sufficiently exercised. For example, a study of 'warden housing' (housing with a live-in caregiver) in England found that tenants in this type of housing used more services than people of comparable health not living in housing with wardens."(97)
Asian countries, for the most part, are still focusing their attention on how to provide shelter and services to older persons who need institutional care. Nursing homes and similar facilities are currently few in number and often insufficient to meet prevailing needs.
Given the current trends, however, many countries in Asia will soon need to address the issue of special housing for the elderly. As the numbers of elderly increase - with their special economic, work, and health situations - there will be a growing need to address the living option issues that will arise.
The 'crisis' of population ageing
Many Asian countries have already begun to confront the complex issues arising with the ageing of their populations. Several others will have to face similar issues in the not too distant future. The choices that countries will be forced to make as a result of this demographic phenomenon are not likely to be dramatic ones and will certainly not be new. No cataclysmic changes are likely to be needed. Rather, countries will have to deal with age-old issues related to economic growth and the equitable distribution of income and wealth in the context of fewer children and more old people.
The phenomenon of an ageing society is basically an outcome of a country's prior policy decisions and economic achievements. It results, in large part, from a country's successful investment of human resources and economic capital to promote economic growth. It is also fuelled by higher levels of education, greater economic opportunities (especially for women), and rising incomes, each of which promotes lower fertility rates. Public health efforts and biomedical research also contribute to the changes in population composition.
In both developed and developing countries, there is a rise in the proportion of the older population associated with a concurrent increase in GDP, greater life expectancy, earlier retirement, changing health-care needs, and collective income provision for retirement. Whether a country's population is predominantly young or old, it is the level of economic output that determines general living standards, and it is the growth of that output that affects the ability of the economy to meet the needs of its citizens, young and old. Some assert that population ageing is detrimental to growth, but evidence that this is so is hard to find.(98) The determinants of growth are more likely to be business savings, human and capital investment, technological change, managerial/ entrepreneurial skills, etc.
Population ageing raises many vital issues other than the 'economic burden of the elderly'. It is important that countries understand the changes that are occurring with the ageing phenomenon, and the shifts in public and private attitudes and practices that need to be considered.
1. 1 Helen Kerschner: "Balancing humanitarianism, development", in Aging Today, March/April 1996, pp. 7, 9.
2. 2 World Bank: Averting the old age crisis. Policies to protect the old and promote growth. A World Bank policy research report (New York, Oxford University Press Inc., 1994).
3. 3 Susanne S. Paul and James A. Paul: Humanity comes of age (Geneva, WCC Publications, 1994), p. xiii.
4. 4 This section expands on information presented in an earlier publication: James H. Schulz: The world ageing situation 1991 (New York, United Nations, 1991).
5. 5 Kevin Kinsella: Aging in the Third World, International Population Reports Series P-95, No. 79 (Washington, DC, U.S. Government Printing Office, 1988), p. 14.
6. 6 Gary R. Andrews et al.: Aging in the Eastern Pacific (Manila, World Health Organization, 1986).
7. 7 Chen Ai Ju and Gavin Jones: "Ageing in ASEAN: Its socio-economic consequences (Singapore, Institute of Southeast Asian Studies, 1989), p. 76.
8. 8 Lin Yan: "Health care of the elderly in the Western Pacific region", in World Health Organization (WHO): Report on Regional Seminar on National Policy Planning for Health of the Elderly (Manila, Regional Office of WHO, 1993), pp. 51-62.
9. 9 Chen Ai Ju and Jones, op. cit.
10. 10 G.C. Myers and S. Maggi: "Worldwide population aging: Implications for health research", in Aging Clinical and Experimental Research, 5(2), 1994, pp. 77-79.
11. 11 Kinsella, op. cit., p. 52.
12. 12 Hal L. Kendig: "Comparative perspectives on housing, aging, and social structure", in Robert H. Binstock and Linda K. George (eds.): Handbook of aging and the social sciences, 3rd edition (New York, Academic Press, 1990), pp. 288-303.
13. 13 Statistics for Indonesia, Malaysia, and the Philippines are from the ASEAN ageing survey. Statistics for Singapore are reported in David R. Phillips and H.P. Bartlett: "Aging trends - Singapore", in Journal of Cross-Cultural Gerontology, 10, 1995, pp. 349-356.
14. 14 Kinsella, op. cit., table 6-1.
15. 15 Andrews et al., op. cit.
16. 16 Robert L. Clark and Richard Anker: Labour force participation rates of older persons: An international comparison, Population and Labour Policies Programme Working Paper No. 171 (Geneva, ILO, 1989).
18. 18 It should be borne in mind that labour force participation rates such as these take no account of the very many women who are family workers. (ed.)
19. 19 Eva Mueller: "The value and allocation of time in rural Botswana", in Journal of Development Economics, Vol. 15, Nos. 1-3, pp. 329-360. Time allocation data pertain to the day prior to the survey interview and were obtained for all persons in the household aged six or older (4,600 individuals).
20. 20 Neena L. Chapell: "Aging and social care", in Robert H. Binstock and Linda K. George (eds.): Handbook of aging and the social sciences, 3rd edition (New York, Academic Press, 1990), pp. 438-454.
21. 21 Walt W. Rostow: The stages of economic growth: A non-communist manifesto (London, Cambridge University Press, 1960).
22. 22 Historically, life expectancy has risen mostly because of declines in mortality rates among infants and young children. However, there has been a smaller but significant (and steady) increase in life expectancy at the end of the lifespan.
24. 24 As discussed above, economic activities of the aged include much more than participation in the formal labour force. Work in the home, caregiving and community work are also important.
25. 25 B.B. Torrey, K. Kinsella, and C.M. Taeaber: An aging world, International Population Reports Series P-95, No. 78 (Washington, DC, U.S. Government Printing Office, 1987), table 9.
26. 26 James H. Schulz, Allan Borowski, and William Crown: Economics of population aging: The "graying" of Australia, Japan, and the United States (New York, Auburn House, 1991), Ch. 5.
27. 27 Chen Ai Ju and Jones, op. cit., tables 5.2 and 5.3.
28. 28 Mercedes B. Concepcion: "The elderly in Asia", in Population aging: Review of emerging issues, Asian Population Studies Series No. 80 (Bangkok, U.N. Economic and Social Commission for Asia and the Pacific, 1987), pp. 21-32.
29. 29 See, for example, Delia Davin: "Family care and social security in China before and after the reforms", in Renate Krieg and Monika Schädler (eds.): Social security in the People's Republic of China (Hamburg, Institut für Asienkunde, 1994), pp. 103-116; Economic development, social progress and family changes in the east-Asian hemisphere, Summary of conference discussion, Chiang Mai, Thailand, 27-29 November 1995 (reproduced); Tan Poo Chang: "Family changes and the elderly in Asia", in The ageing of Asian populations (New York, United Nations, Department for Economic and Social Information and Policy Analysis, 1994), pp. 33-40.
30. 30 Economic development, social progress and family changes in the east-Asian hemisphere, ibid.
31. 31 Kenneth Boulding: Principles of economic policy (New York, Basic Books, 1958), p. 236.
32. 32 James H. Schulz and John Myles: "Old age pensions: A comparative perspective", in Robert H. Binstock and Linda K. George (eds.): Handbook of aging and the social sciences, 3rd edition (New York, Academic Press, 1990), pp. 398-414.
33. 33 Christine Cockburn: "The role of social security in development", in International Social Security Review, 33, 1980, pp. 337-358.
34. 34 Charles E. Lindblom: Politics and markets (New York, Basic Books, 1977), p. 48.
35. 35 Wu Fa: "Rural endowment insurance system established", in Beijing Review, 12-18 February 1996, pp. 18-20.
36. 36 Sahdev K. Wadhawan: Social security for workers in the informal sector in India (Geneva, ILO, 1989), p. 81.
37. 37 Important exceptions are the Central Labour Welfare Funds set up by the central government's Ministry of Labour to provide health care to certain occupational categories (e.g. miners of mica, limestone, iron, and manganese).
38. 38 The physically and mentally handicapped and widows are also eligible at any age if they satisfy all the other eligibility conditions. Excluded are persons housed in institutions run by private or government social welfare organizations.
40. 40 In 1988, the benefit was Rs. 60 per month per person, subject to a maximum of Rs. 150 per family (if there are more than two destitute persons living together).
41. 41 James Midgley: "Social assistance: An alternative forum of social protection in developing countries", in International Social Security Review, 37 (3/84), pp. 247-264.
42. 42 For a detailed discussion of provident funds see John Dixon: "Provident funds in the Third World: A cross-national review", in Public Administration and Development, Vol. 2, 1982, pp. 325-344; and John Dixon: "Provident funds: An assessment of their social security, social, and economic performances and prospects", in James H. Schulz and Deborah Davis-Friedmann: Aging China: Family, economic, and government policies in transition (Washington, DC, Gerontological Society of America, 1987), pp. 173-193.
43. 43 Dimitri Vittas and Michael Skully: Overview of contractual savings institutions, Working Papers, Country Economics Department, WPS 605, (Washington, DC, World Bank, 1991), p. 8.
44. 44 World Bank: Averting the old age crisis. Policies to protect the old and promote growth. A World Bank policy research report (New York, Oxford University Press Inc., 1994), table 6.3.
46. 46 J. Midgley: Social security, inequality, and the Third World (Chichester, UK, Wiley, 1984). Midgley provides a review of social security developments occurring in the Third World. See also the discussion by James H. Schulz: The world ageing situation 1991 (New York, United Nations, 1991).
47. 47 K. Thompson: "Trends and problems of social security in developing countries in Asia", in ILO: Social security and national development (Bangkok, 1978), pp. 50-56.
48. 48 C. Mesa-Lago (ed.): The crisis of social security and health care: Latin American experiences and lessons (Pittsburgh, Pennsylvania, University of Pittsburgh Press, 1985).
49. 49 The ASEAN survey found that in Malaysia, for example, children and grandchildren were the main sources of support for 38 per cent of aged men and 67 per cent of aged women.
50. 50 United Nations Population Fund: Population, resources, and the environment: The critical challenge (New York, 1991).
51. 51 Michael P. Todaro: Economic development, 5th edition (New York, Longman, 1994), p. 151.
52. 52 HelpAge International: Older women in development (London, 1995), pp. 4, 5.
53. 53 Susanne and James Paul, op. cit.
54. 54 China National Committee on Aging: Population aging in China, Asian Population Study Series No. 95 (Bangkok, U.N. Economic and Social Commission for Asia and the Pacific, 1989).
55. 55 "The economics of ageing", in The Economist, 27 July 1996, pp. 3-16 (survey section).
56. 56 An example of attitudinal research for one country (Japan) is found in Naohiro Ogawa and Daniel B. Suits: "Retirement policy and Japanese workers: Some results of an opinion survey", in International Labour Review (Geneva, ILO), 1983, Vol. 122, No. 6, pp. 733-746.
57. 57 James H. Schulz, Kazuo Takada, and Shinya Hoshino: When "lifetime employment" ends: Older worker programs in Japan (Waltham, Massachusetts, Policy Center on Aging, Heller School, Brandeis University, 1989).
58. 58 Tan Boon Chiang: Labour policy issues for the old age worker, General Report, Theme II, Sixth Asian Regional Congress, International Society for Labour Law and Social Security, Tasmania, Australia, February 1996, p. 19 (reproduced).
60. 60 See further discussion of these points in James H. Schulz: "The 'buffer years' - Market incentives and evolving retirement policies", in J. Myles and J. Quadagno (eds.): States, labor markets, and the future of old-age policy (Philadelphia, Temple University Press, 1991), pp. 295-308.
61. 61 For a brief description of each in an international context, see United Nations: The world ageing situation 1991 (New York, 1991), Part 3, Ch. 1.
62. 62 Peter C. Plett:Training of older workers in industrialized countries (Geneva, ILO, 1990).
63. 63 ESCAP: Population Aging in the Republic of Korea: Report of a study undertaken in the Republic of Korea under the project: "Emerging issues of the aging of population", Asian Population Studies Series No. 97 (Bangkok, 1989).
64. 64 See, for example, H.Z. Lopata: Women as widows: Support systems (New York, Elsevier, 1979) and D.G. Nangen, V.L. Bengtson, and P.H. Landry: Measurement of intergenerational relations (Beverly Hills, California, Sage, 1988).
65. 65 To a lesser extent, they also receive assistance from other relatives and members of their community.
66. 66 A discussion of what can happen is provided in J. Ellickson: "Never the twain shall meet: Aging men and women in Bangladesh", in Journal of Cross-Cultural Gerontology, 3, 1988, pp. 53-70.
67. 67 L.G. Martin: "Living arrangements of the elderly in Fiji, Korea, Malaysia and the Philippines", in Demography, 26, 1989, pp. 627-643.
68. 68 Kevin Kinsella and C. Taeuber: An aging world II. U.S. Bureau of the Census International Population Reports P25, 92-3 (Washington, DC, U.S. Government Printing Office, 1992).
69. 69 "China on the move", in The Economist, 6 July 1996, pp. 33-34.
70. 70 Ken Tout: Ageing in developing countries (Oxford, Oxford University Press for HelpAge International, 1989). p. 49.
71. 71 See, for example, the discussion of this point in A.S. Oberai and H.K. Manmohan Singh: Causes and consequences of internal migration: A study in the Indian Punjab (New Delhi, Oxford University Press for the ILO, 1983).
72. 72 Tout, op. cit., p. 283.
73. 73 U.N. Economic and Social Commission for Asia and the Pacific: Population aging: Review of emerging issues, Asian Population Studies Series No. 80 (Bangkok, 1987), p. 9.
74. 74 L.J. Kotlikoff: "Justifying public provision of social security", in Journal of Policy Analysis and Management, 6, 1987, pp. 674-689.
75. 75 See, for example, Eric R. Kingson and James H. Schulz: Social security in the 21st century (New York-Oxford, Oxford University Press, 1997).
76. 76 A summary of the wide-ranging research and debates on this question is provided in Karen Holden: "Social security and family size: A review of the literature", in James H. Schulz and D. Davis-Friedmann (eds.): Aging China: Family, economic, and government policies in transition (Washington, DC, Gerontological Society of America, 1987), pp. 147-172; and Jeffrey B. Nugent and Richard Anker: Old age support and fertility, Population and Labour Policies Programme Working Paper No. 172 (Geneva, ILO, 1990).
77. 77 For a discussion of these issues see International Social Security Association: Conjugating public and private: The case of pension integration (Geneva, 1987); R. Clark and A. McDermed: Pension regulation and pension structure (Washington, DC, American Enterprise Institute, 1989).
78. 78 ILO: Approaches to social security: An international survey, Studies and Reports Series M (Social Insurance) No. 18 (Montreal, 1942).
79. 79 A discussion of the historical, political and economic aspects of this shift can be found in John Myles: Old age in the welfare state: The political economy of pensions (Boston, Little Brown, 1984).
80. 80 See the discussion of these points in Irwin Garfinkel (ed.): Income-tested transfer programs: The case for and against (New York, Academic Press, 1982).
81. 81 Wu Naitao: "Community services for senior citizens", in Beijing Review, 12-18 February 1996, pp. 15-17.
82. 82 See, for example, Peter McDonald: "Ageing in Asia: The role of families" , in International Symposium on Aging: Policy Issues and Future Challenges, Proceedings (Beijing, China National Committee on Aging, 1989), pp. 45-53.
83. 83 Yow-Hwey Hu: "Elderly suicide risk in family contexts: A critique of the Asian family care model", in Journal of Cross-Cultural Gerontology, 10 (3), September 1995, pp. 199-217.
84. 84 Tan Boon Chiang: Labour policy issues for the old age worker, General Report, Theme II, Sixth Asian Regional Congress, International Society for Labour Law and Social Security, Tasmania, Australia, February 1996 (reproduced).
85. 85 Raymond Ngan and William Wong: "Injustice in family care of the Chinese elderly in Hong Kong", in Journal of Aging and Social Policy, 7(2), 1995, pp. 77-94. The reference in the quote is to J. Pulling: The caring trap (London, Fontana, 1987).
86. 86 Raymond Ngan: "The availability of informal support networks to the Chinese elderly in Hong Kong and its implications for practice", in Hong Kong Journal of Gerontology, 4(2), 1990, pp. 19-27.
87. 87 Ngan and Wong, op. cit.
88. 88 Ehtisham Ahmad: Protecting the vulnerable: Social safety nets and public policy, International Monetary Fund paper (Washington, DC, Fiscal Affairs, IMF, 1991); Ehtisham Ahmad: "Social security and the poor: Choices for developing countries", in The World Bank Research Observer, Vol. 6, June 1991, pp. 105-127.
89. 89 Wu Naitao, op. cit., pp. 15-17.
90. 90 Howard A. Palley and Chikako Usui: "Social policies for the elderly in the Republic of Korea and Japan: A comparative perspective", in Social Policy Administration, 29, September 1995, pp. 241-257.
92. 92 Hal L. Kendig, Akiko Hashimoto, and Larry C. Coppard (eds.): Family support for the elderly: The international experience (Oxford, Oxford University Press for the World Health Organization, 1992), pp. 10, 11.
93. 93 Akiko Hashimoto: "Living arrangements of the aged in seven developing countries: A preliminary analysis", in Journal of Cross-Cultural Gerontology, Vol. 6, 1991, pp. 359-379.
94. 94 Powell Lawton: "Housing and living environments for older people", in Robert H. Binstock and Ethel Shanas (eds.): Handbook of aging and the social sciences, 2nd edition (New York, Von Nostrand Reinhold, 1985), pp. 450-478.
95. 95 World Health Organization: Report on Regional Seminar on National Policy Planning for Health of the Elderly (Manila, 1993), p. 13.
96. 96 M. Powell Lawton: "Environments and living arrangements", in R.H. Binstock, Wing-Sun Chow, and J.H. Schulz (eds.): International perspectives in aging: Population and policy challenges, Policy Development Studies #7 (New York, United Nations Fund for Population Activities, 1982), pp. l59-l92. Lawton cites M. Messer: "The possibility of an age-concentrated environment becoming a normative system", in Gerontologist, 7, l969, pp. 247-25l; I. Rosow: Social integration of the aged (New York, Free Press, l967); and M. Powell Lawton: Social and medical services in housing for the elderly (Washington, DC, U.S. Government Printing Office, 1980).
97. 97 Lawton, 1985, op. cit., p. 459.
98. 98 James H. Schulz, Allan Borowski, and William H. Crown: Economics of population aging: The "graying" of Australia, Japan, and the United States (New York, Auburn House, 1991).
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