Name: Tam Shuk Yi, Sukie

Student No.: 10128563D

Class: SEM001

The economic perspective on aging in Hong Kong According to the Census and Statistics Department (2006), the growth of the population aged 65 or above increased from 10% in 1996 to 12.4% in 2006, but that of people aged 0 to 14 decreased from 18.5% in 1996 to 13.7% in 2006. These figures imply that the population will continue aging. As Dodwell (2010) stated, aging is negatively influencing the economy of Hong Kong. This essay aims to analyze the causation between the major cause and the related problems of aging, and suggest new possible solutions to those problems. This essay will cover the following aspects: the definition and root cause of aging, two problems brought by aging and their related possible solutions.

As Gavrilov and Heuveline (2003) mentioned, Aging of population is a summary term for shifts in the age distribution of a population toward older ages. Many people may consider someone who aged 60 or above is an elderly person. According to Dodwell (2010), however, the word old is a measure of health or ability. Age is, therefore, not a decisive factor to define how old is old. People are, instead, defined as old in terms of their health condition.

People lack willingness to give birth perhaps is the major cause of aging (Lutz, Neill and Scherbov, 2003). The education level of people is higher than before as Hong Kong has changed from an agricultural society to a financial community. Many women tend to work outside instead of staying at home and doing housework. As less time is left for women to care their children (Brandth and Kvande, 2001), there is, hence, less incentives for young couples to give birth. Fewer new generations are injected into society, but more people become old, the elderly eventually occupies a relatively large proportion in the whole population than others. The problem of aging in Hong Kong is
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intensified consequently.

According to Dodwell (2010), there may be a loss of productivity due to aging. Most people retire on the age of 65 as they can reclaim the money they saved under the Mandatory Provident Fund scheme. This implies that people are assumed to be old to work after the age of 65. There is, therefore, less manpower to support the whole society. This means that, as Cheung (2006) stated, companies are losing skillful employees to maintain the need for business growth. The reasoning behind is that corporations may need to recruit new workers to replace the positions of those retired. The new workmen, however, are comparatively less familiar with the job. The productivity of enterprises may fall accordingly.

Providing jobs to the elderly can be a way to tackle the above problem. Schulz contended that (2002), people stop working not owing to becoming old; instead, people become old because they stop working. Some institutions may have a bias against the aged. Performance, nevertheless, is a more crucial factor to evaluate employees. A survey conducted by the elderly-friendly employment program (2009) indicated that, about 20% of the respondents are at tertiary level and mainly engaged in professional fields. It may be, therefore, a better choice for the government to contemplate on utilizing local workforce instead of importing professionals. By keeping the elderly in their positions, the government can save the cost of importing workers and enjoy the productivity provided by the elderly.

Aging may suspend the economic growth of Hong Kong (Chan and Phillips, 2002). As published by China Review New (2006), the elderly tend to save more money compared with the younger generation. The consumption structure of the economy will change accordingly. This may be unfavorable to the gross domestic product (GDP) since consumption expenditure is usually the largest portion of GDP. The tax base may also become narrower as the
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number of taxpayers may fall. Combined with the greater demand on health and social services by the elderly, the government expenditure may increase while its receipt decreases. The fiscal surplus of the government, hence, may reduce gradually and even become negative, which may hinge the economic growth in the long run.

Increasing the flexibility of work can be a long term solution to the above problem. As mentioned before, the more the time people stay in offices, the lesser the time they left to look after their children. If companies allow people to work flexibly, like lowering the working hours or allowing part-time work, as Dex and Scheibl (2001) stated, people can strike a balance between working life and family life. Alternatively, women can care their children and pursue their career simultaneously. By eliminating the block of caring children, women may become more interested in giving birth. If more new generations are injected into society, the proportion of elderly can be balanced.

In summary, it is the lack of willingness of people to give birth that lead to the aging problem. This raises the problem of loss of productivity. Providing jobs to the elderly can be a way to tackle this problem as people who just retired are still healthy enough and have the ability to work. Another problem attributed by aging is that the economic growth of Hong Kong may be suspended. For the sake of curing the problem, only by increasing the flexibility of work can women strike a balance between working and having babies. Although the problems may not be solved completely, the solutions can at least minimize the problems and prevent the problem from getting worse.

References: Alfred C.M. Chan and David R. Phillips (2002). Policies on Aging and long-term care in Hong Kong Berit Brandth & Elin Kvande (2001). Flexible work and flexible fathers, 251-267 Census and Statistics Department (2006). 2006 Population By-census
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China Review News (2010). Aging: China has to face the reality David Dodwell (2010). Aging tsunami Shirley Dex & Fiona Scheibl (2001). Flexible and family-friendly working arrangements in UK-based SMEs: Business cases, British Journal of Industrial Relations, 39, 411-431 Elderly-friendly employment program (2009). The expectation of working conditions when considering re-employment Leonid A. Gavrilov & Patrick Heuveline (2003). Aging of population James Schulz (2002). Population aging: opportunities and challenges Stephen Cheung (2006). The aging perspective on sales tax Wolfgang Lutz, Brian C. O'Neill, Sergei Scherbov (2003). Europes Population at a Turning Point, Science, 299, 1991