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Posted: May 15th, 2023
To Prepare:
Select a specific geographical location (e.g., a city, state, or country) and consider factors related to the aging population that affect its economy.
BY DAY 4
Post by Day 4 the name of your selected location and an explanation of three factors related to the aging population that impact its economy. Support your post with this week’s Learning Resources and two other scholarly journal articles. Then, post three suggested strategies for managing the potential impact of the factors you identified.
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RESOURCES
Required Readings
• Kunkel, S. R., & Settersten, Jr., R. A. (2022). Aging, society, and the life course (6th ed.). Springer.
o Chapter 7, Economics of Aging” (pp. 166–192)
• Financial Consumer Agency of Canada. (2016). Financial literacy self-assessment quiz.Links to an external site.Retrieved from https://itools-ioutils.fcac-acfc.gc.ca/FLSAT-OAELF/ques-ques-eng.aspx
• Lusardi, A. (2012). Financial literacy and financial decision-making in older adults.Links to an external site.Generations, 36(2), 25–32.
Selected Location: Japan
Factors Related to the Aging Population Impacting Japan's Economy:
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Declining Workforce: Japan has been experiencing a rapidly aging population, with one of the highest life expectancies globally and a low birth rate. This demographic trend has resulted in a declining workforce, which poses a significant challenge to the country's economy. A smaller labor force can lead to a shortage of skilled workers, decreased productivity, and increased labor costs, ultimately affecting economic growth.
Increased Healthcare Expenditures: As the population ages, there is an increased demand for healthcare services and a rise in healthcare expenditures. Older adults tend to require more frequent medical attention, long-term care, and specialized treatments. The increased financial burden of providing healthcare for the aging population can strain the government's budget and impact other sectors of the economy, such as education or infrastructure development.
Rising Pension and Social Security Costs: Japan's aging population also contributes to rising pension and social security costs. As more individuals retire and fewer workers enter the labor market, the funding for pensions and social security benefits becomes increasingly challenging. The burden falls on the working-age population to sustain the pension system, potentially leading to higher taxes or reduced government spending on other essential areas, hindering overall economic development.
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Strategies for Managing the Impact of Aging Population on Japan's Economy:
Encouraging Labor Force Participation: Implement policies and incentives to encourage labor force participation among older adults. This can include flexible work arrangements, training and re-skilling programs, and reducing mandatory retirement ages. By tapping into the potential of older workers, Japan can mitigate the impact of a declining workforce and enhance productivity.
Promoting Long-Term Care Insurance and Innovation: Invest in long-term care infrastructure and promote the adoption of long-term care insurance to alleviate the financial burden on individuals and families. Additionally, encourage innovation in healthcare technologies and services to improve efficiency and reduce costs in providing care for older adults.
Reforming Pension and Social Security Systems: Undertake comprehensive reforms to ensure the sustainability of the pension and social security systems. This may involve increasing the retirement age, adjusting contribution rates, diversifying funding sources, and exploring public-private partnerships. By implementing these measures, Japan can address the fiscal challenges associated with an aging population while maintaining social support for older adults.
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References:
Kunkel, S. R., & Settersten, Jr., R. A. (2022). Aging, society, and the life course (6th ed.). Springer.
Lusardi, A. (2012). Financial literacy and financial decision-making in older adults. Generations, 36(2), 25–32.
Kato, N. (2017). Strategies for managing an ageing society in Japan. Journal of the Royal Society of Medicine, 110(9), 352–355. doi:10.1177/0141076817724720
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Shiba, K., Kondo, N., & Kondo, K. (2020). Effects of population ageing on healthcare expenditure in Japan. International Journal of Environmental Research and Public Health, 17(19), 7229. doi:10.3390/ijerph17197229
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