Workers Aged 25-29 on Decline

Korea’s economically active population aged between 25 and 49 will begin to decrease from this year, for the first time since 1960 when the nation began collecting statistical data on the population category.

The projected drop in the number of economically active population results from the nation’s low birth rate. It is expected that the decrease in the relevant population will bring about side effects such as slowing economic growth, unless the nation comes up with countermeasures.

The Association of Public Finance and Economics released yesterday a report called “Challenges Korea Faces in its Path to Become a Developed Nation.”

The report said that the economically active population aged between 25 and 49 will drop approximately by 70,000 from the previous year to 20.59 million as of July 1, 2008. The population of the age group had gradually increased, surpassed 10 million in 1975, and peaked at 20.66 million last year.

However, the increment of the age group has slowed down since 2005 when baby boomers born between 1955 and 1963 began to turn 50s and the absolute size of the population begins to reduce this year.

The association projected that the pace of the population’s reduction will accelerate. It also said that the population of the age group will decrease by more than 2 million every ten years from 2020, falling to 9.96 million by 2050.

The report said that the decrease in the economically active population may lead to slowing economic growth, aggravating fiscal difficulties, and deepening polarization.

In particular, the report said that the economic growth rate is likely to turn negative from 2020 when those aged 65 or over account for more than 15 percent of the total population. It added that the growth rate could turn negative even earlier than expected.

Im Byeong-in, an economics professor of Chungbuk National University, said, “Korea does not have much time to deal with such a phenomenon since the pace of its population aging is faster than those of the UK, and France.” He added that the government needs to come up with measures to reeducate the aged and attract foreign experts.

legman@donga.com