The Taiwan government has predicted that the island's population will start declining as early as 2021. This is because the birth rate has held at one of the world's lowest for seven years.
The number of Taiwanese would peak at up to 23.8 million before falling to between 17.3 million and 19.7 million by 2060, reports Forbes citing the National Development Council. The birth rate fell to 0.9 in 2011, alarming policymakers about long-term productivity on the island that depends on manufacturing as an economic staple.
Resources shift to the elderly
A population decline, without intervention, will hurt Taiwan's productivity by taking people and government funds away from industry. It would manifest as increased government spending on the elderly instead of on economic initiatives and decreased average incomes as people retire early to look after their parents, economists say. A dearth of younger people in workplaces could cramp tech innovation but require longer hours to keep companies healthy.
“Overall productivity tends to decline as a population ages,” said Ma Tieying, a Taiwan-specialised economist with DBS Bank in Singapore. “Older workers are less productive than younger ones, and the increase in pension and healthcare benefits in an aging society could crowd out public spending on technology and education.”