Weakening Korea’s Growth Potential

South Korea’s working age population totaled 36,196,000 as of Nov. 1, 2017, down by 116,000 (0.3 percent) from the previous year.

Last year, South Korea’s working age population 15 to 64 years old declined for the first time. The proportion of Korea’s elderly population exceeded 14 percent so Korea entered an era of an aged society.

According to the results of the 2017 Population and Housing Census released by Statistics Korea on August 27, as of November 1 of 2017, Korea’s working age population was 36,196,000, down by 116,000 (0.3 percent) from the previous year. This marked the first time that Korea’s working age population dropped. The number of Korea’s population under 14 is expected to keep on sliding as the figure has been on a steady decline with a drop of 137,000 last year.

The proportion of elderly people aged 65 and over was 14.2 percent as the aging speed rose.

The percentage hit the level seven years faster than Japan (24 years) since Korea became an aging society in 2000 with the percentage topping 7 percent. More than 7 percent of the elderly population makes a nation an aging society. A more than 14 percent elderly population means that a nation is an aged society. A super aged society means that more than 20 percent of a nation’s population is aged.

Korea’s low birth rate and aging are nothing new. What really matters is speed. Korea’s working age population was 50,000 fewer than an estimate made by Statistics Korea in 2016. This means that Korea’s time to prepare for an economic decline such as consumption and production shrinkage caused by aging was reduced by that much. "Korea needs to raise its labor productivity as its growth potential may fall sharply in the future," said Kim Won-kyu, a senior researcher at the Korea Institute for Industrial Economics and Trade.

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