World Congress of Comparative Economics An Analysis on Demographic Structural Change in North Korea and Its Implications Choi, Jiyoung Economic Research Institute (the Bank of Korea) DISCLAIMER: The views expressed in this presentation represent those of the presenter and do not necessarily represent those of the Bank of Korea
Motivation Demographic Change since Korean Unification Positive expectation Solving the aging problem and low fertility rate in SK NK has higher fertility rate and higher youth population ratio than SK This positive expectation could be realized? NK already entered the aging society in 2004 NK s fertility rate has decreased since the 1990 s crisis.
Outline North Korean Demographic statistics Comparing of Demographic Structure NK v.s SK NK v.s China and Vietnam How about the demographic dividend effect in NK? Integrated Korea v.s SK Integration of two Korean population could alleviate the aging problem of SK? The Korean Peninsula v.s Reunified Germany The Korean Peninsula has the favorable conditions than Germany w.r.t demographic structure?
Demographic Statistics of North Korea Raw Data Official Civilian Registration Statistics 1947~1987, 1989, 1996, 1999, 2000 Based on registered population survey Not including those living in group facilities(prisons, military housing) Census Data 1993, 2008 Conducted with the assistance of the UNEFA Including those living in group facilities
Demographic Statistics of North Korea The estimated and projected statistics KOSTAT Based on the census data 1993~2008(estimation), 2009~2055(projection) Reporting the population projection on medium fertility rate UN Population Division(World Population Prospects, 2012) Based on both raw data(official registration data and census data) 1950~2010(estimation), 2011~2100 년 (projection) Reporting the population projection on various scenarios regarding fertility rate, death rate, migration
KOSTAT vs. UN (1993~2055) Total Population Working-Age Population Share 28,000 27,000 26,000 25,000 24,000 23,000 22,000 21,000 20,000 thousands the KOSTAT the UN 2037 (26,536) 2044 (27,113) 72.0 71.0 70.0 69.0 68.0 67.0 66.0 65.0 64.0 63.0 62.0 % 2010 (68.6%) 2020 (70.7%) the KOSTAT the UN 2029 (68.3%) 2019 (70.3%) 2029 (67.2%) Note: Projected populations from 2008 by the KOSTAT and from 2010 by the UN based on assumption of medium fertility Sources: KOSTAT, UN
Previous Studies 1. Credibility of Population Statistics q Suspecting the credibility of statistics Intending to conceal the size of North Korean military? q Eberstadt and Banister(1992a) The sex ratio dropped sharply in civilian registration data Reconstructing sex ratio and estimating the number of military population as 125 million q Lee(2011) The unallocated population: 690 ~ 700 thousand It is far below the 1.25 million expected military population The share of military population for conscripted age dropped sharply Reconstructing the male conscription ratio and estimating the number of military population as 116 million
Previous Studies 2. The number of famine-related Deaths q The results are depending upon their assumptions, methods of estimation and data q Eberstadt(2001), Goodkind and West(2001), Lee(2004), Park(2012) 3. Demographic issues after reunification q q Focusing on the German unification experience(eberstad and Banister, 1992b; Kim, 2010; Stephan, 2013) Demographic trend after combining two Korean populations(lee and Kim)
DEMOGRAPHIC STRUCTURE IN NK - COMPARED TO SK, CHINA AND VIETNAM
NK v.s SK(total population) Total Population q The share of NK population to SK population: around 50% 100 80 60 40 millions Total Population(SK,left) Total Population(NK,left) Growth rate(sk,right) Growth rate(nk,right) % 4.0 3.0 2.0 1.0 q The growth rate of total population 1950~1955: SK>NK - migration from NK to SK - fertility rate 1965~1980: NK>SK - Family planning program to reduce fertility rate 20 1950 1965 1980 1995 2010 0.0-1.0 2005~2010: - NK s growth rate decreased to 0.5% - decrease in fertility rate and life expectancy
NK v.s SK(age structure) 100+ 90-94 80-84 70-74 60-64 50-54 40-44 30-34 20-24 10-14 0-4 South Korea Age Structure Noth Korea 65+(12.2%) 65+(9.5%) 15~64(72.9%) 15~64(68.9%) 0~14(14.9%) 0~14(21.6%) -6000-4000 -2000 0 2000 4000 6000 the youth population share (aged 0~14) - NK(21.6%)> SK14.9%) the working-age population share (aged 15~64) - SK(68.9%)> NK(72.95) the elderly population share (aged 65+) - SK(12.2%)>NK(9.5%) - Two Koreas entered the aging society life expectancy(in 2010) - NK(68 years)<sk(80 years)
NK v.s SK(WA share& TFR) Working-Age Population Share Total Fertility Rate 75 70 65 60 55 % 1990 2020 World More Developed Less Developed NK SK 7 6 5 4 3 2 children 1980(2.8) 1990(2.3) 2010(2.0) World More developed Less developed NK SK 50 1 2010(1.3) 45 0
NK v.s SK(population aging) 40 35 30 25 20 15 10 5 % Elderly Population Shares World More Developed Less Developed NK SK Aged Society Aging Society 0 1950 1975 2000 2025 2050 2075 2100 Periods Required for Transitions from Aging to Aged Society Less Developed Years of Status beginning Period 7% 14% 7~14% 2050 2090 40 years Developing 2015 2040 24 years More Developed Before 1950 1995 More than 45 years South Korea 2000 2018 18 years North Korea 2004 2034 30 years Integrated Korea Sources: Jeong(2013), UN 2001 2022 21 years
NK vs. China and Vietnam First Demographic Dividend Effect Decrease in Fertility and Death rate Working-Age population increases faster than Dependent population Previous Studies on demographic effect in Asia Bloom and Williamson(1998) Feng Wang(2012), Cai Fang(2011) : China Nguyen Thi Minh(2009) : Viet Nam
NK vs. China and Vietnam 1,200 1,000 800 600 400 200 US dollar Per Capita GDPs 1) DPRK(left) Viet Nam(left) China(right) 1989 (798$) 1991 (708$) 1998 (481$) US dollar 1970 1976 1982 1988 1994 2000 2006 2012 3,500 3,000 2,500 2,000 1,500 1,000 500 110 100 90 80 70 60 50 40 30 20 % 1971 (83.3%) Dependency Ratios DPRK Viet Nam China 1991 1998 (44.6%)(47.5%) 2004 2012 (47.4%)(45.4%) Note: 1) For each country, GDP in 2005 US dollars divided by the total population Source: UN
NK vs. China and Vietnam Demographic Dividend Effect the contribution rate in GDP per capita growth of Working- Age Population Ration growth GDP per capita can be decomposed into 3 components = _ _ : total population, : employed population, _ : Working-Age population
NK vs. China and Vietnam 75.0 73.0 71.0 69.0 67.0 65.0 63.0 61.0 59.0 57.0 55.0 WA Population Share(1992~2012) % 1997 (59.6%) 2000 (67.5%) 2008 2005 (68.7%) (71.8%) DPRK Viet Nam China 2.0 1.5 1.0 0.5 0.0-0.5-1.0 % Rates of Growth in WA Population Shares(1992~2012) 1997 (1.1%) 2000 (1.0%) 2005 (1.1%) 2008 (1.3%) DPRK Viet Nam China
The Comparison of Demographic Dividend Effect Average Rage of Growth in GDP per capita and their components(1992~2012) China Vietnam North Korea Per capita GDP [A] 9.51 5.99-1.38 Labor productivity 9.27 5.11-1.35 Employment ratio -0.34-0.13 0.00 WA pop ratio [B] 0.59 1.01-0.03 Contribution rate of WA pop ratio [B/A] 6.19 16.90 1.92 Note: 1) average rate of growth Sources: UN, WDI Demographic Dividend Effect : Vietnam(16.9%)> China(6.2%)> NK(1.9%)
NK vs. China and Vietnam Changes in Income and Population Structures after Reform and Opening Policies Beginning of Reform and Opening Policies Working-Age GDP per capita 1) Population Share(%) China(1978) 197 57.8% Vietnam(1986) 250 55.7% North Korea(2002) 519 68.0% Annual Growth Rates Following China(1978~1988) 8.5% 1.0% [increase 6.7%p] Vietnam(1986~1996) 4.3% 0.6% [increase 3.3%p] Policies 2) North Korea(2002~2012) 0.2% 0.1% [increase 0.6%p] notes: 1) UN dollar in 2005 2) Changes 10 years after reform and opening policies 3) [ ] is the increase of WA population share source: UN
DEMOGRAPHIC STRUCTURE OF AN INTEGRATED KOREA - COMPARED TO REUNIFIED GERMANY
Integrated Korea v.s South Korea Working Population Ratio Elderly Population Ratio 75.0 % 45.0 % 70.0 65.0 2025 (67.5%) 40.0 35.0 30.0 2035 (27.1%) 60.0 55.0 50.0 45.0 World More Developed Less Developed SK Integrated Korea 2065 (53.5%) 2065 (49.2%) 25.0 20.0 15.0 10.0 5.0 2035 (23.1%) World More Developed Less Developed SK Integrated Korea 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100
Integrated Korea v.s Germany Comparison of Demographic Indicator Between Germany and Korean Peninsula Germany (1990) Korean Peninsula (1990) (2015) (2020) Total Population(million) 79.1 64.8 75.9 76.5 Sex Ratio(males/ 100 females) 93.0 99.7 97.8 1) 97.7 1) Aged 0-14 (%) 15.9 26.7 16.5 16.0 Age-Structure Aged 15-64 (%) 69.1 68.6 71.6 70.7 Aged 65 and Older(%) 15.0 4.7 11.8 13.3 Sources: Eberstadt and Banister(1992b), UN
Integrated Korea v.s Germany Elderly population share Working-Age Population Share 30.0 % 75.0 % 25.0 20.0 70.0 15.0 10.0 5.0 Germany Integrated Korea 65.0 60.0 0.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 55.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040
Integrated Korea v.s Germany 1.7 1.5 1.3 1.1 0.9 0.7 0.5 German TFR s since Renificatoin children 1990 (1.5 ) 1993 (0.8) 2010 (1.5) 1.4 Expected TFRs of North and South Korea 2020 2025 2030 2035 2040 NK 1.94 1.90 1.88 1.86 1.85 SK 1.39 1.46 1.52 1.57 1.61 Note: 1) Assuming medium fertility Source: UN source: Statistisches Bundesamt
Implications Before Reunification Demographic Bonus already ends! Necessary for labor allocation among industries The share of agriculture sector in employment is relatively higher(35.6%) Labor allocation from agriculture to manufacturing sector After Reunification Population aging could influence to the unification cost Taking a caution of fertility shock The structure of working-age population The share of WA population from NK population in total WA population is expected to increase