The Korean Economic Review
Population Aging in Korea: Macroeconomic Impacts and Financing National Health Insurance
Taejun Lim (Korea Insurance Research Institute)Year 2016Vol. 32No. 2
We provided a quantitative model to analyze the impacts of population aging on theKorean economy and National Health Insurance (NHI). We found that the NHI premiumrate for workers should be increased by 3.7 percentage points between 2015 and 2060 tofinance the augmented burden of the NHI program as a result of the aging population.Within the same period, the aggregate labor would be decreased by 30.9 percent despite theincrease in employment ratio by 2.2 percentage points while the aggregate output wasdecreased by 18.3 percent. To make distinction between the population aging effect and theeffect from the increased NHI premium rate, we conducted an experiment where the NHIpremium rate for workers was held constant at the level of 2015 along the transition path.The experiment showed that the distortion effect of the increased NHI premium rate wouldbe only minor compared to the direct effect of population aging.