Research

Publications

(1) The Aging Tax on Potential Growth in Asia (2022). Journal of Asian Economics, Vol. 81, p.101495. [Paper], [PDF]

Abstract Population aging is becoming a prominent issue in Asia, especially for developing countries where demographic changes have asserted a downward pressure on the rate of growth. This paper refers to such potential unwanted effects as an “aging tax” and analytically examines them from a neoclassical perspective, using a Diamond-type overlapping generations model with endogenous retirement, survival rate, and old worker productivity. Based on this setup, negative impacts exist if too many old workers that are sufficiently unproductive choose to defer retirement under the aging pressure, which drains resources from future generations. Numerical simulations show that an aging tax can reduce the potential per capita growth rate (technology-adjusted) by up to 0.12 percentage points annually for some countries in Asia. Our results highlight that countries with sufficiently large labor shares (due to a high ratio of self-employment or a manual labor-centric production) and inadequate educational attainment are potentially the most sensitive and vulnerable to population aging.

Working Papers

(1) Sandwich Caregivers, Elderly Care, and Employment in an OLG Model with Endogenous Fertility. [PDF]

Abstract "Sandwich caregivers" are defined as adults who must care for their dependent parents and children simultaneously. In this paper, we consider an overlapping generations model to study the consequences of such a double burden on their decisions on fertility and career (type of employment). In a fertility-declining environment, subsequent generations face a heavier care burden since they have fewer siblings to share. We show that if the pressure of elderly care on a young worker's time is sufficiently large, more workers will resort to taking nonregular jobs. Furthermore, a sufficiently high upskilling time cost (due to increased studying and training requirements) can prevent the economy from achieving a full regular employment ratio in the long run, regardless of the initial value of the capital stock. We then extend the model to analyze the case when a government elderly care support program is in place. A numerical simulation shows that such a policy can have a positive welfare effect and improve the full-time employment capability of the economy.

(2) Declining Fertility and R\&D-based Growth: The Role of Higher Education. [PDF]

Abstract In this paper, we examine the relationship between declining birth rates and economic growth in an overlapping generations framework with endogenous fertility, tertiary education choices, and R\&D activities. As technology expands, it increases the returns to education and motivates individuals to obtain a higher education degree. However, suppose the childrearing opportunity cost is sufficiently high, and the entry to higher education is sufficiently loose. In that case, an oversupply of tertiary education takers with subreplacement fertility can lead the economy to a state of prolonged stagnation or population decline. In both cases, there is no technological progress, but the former can maintain a fixed population size and welfare level, while the latter experiences an asymptotically empty population and a persistent decrease in welfare. We find that a policy intervention that restricts admission to tertiary education could fix the long-run trajectory and secure a balanced growth path for future generations. However, implementing such a policy requires careful consideration due to the potential loss in welfare it may impose on current generations.

Work in Progress

  • Technology, Childlessness, and Involuntary Unemployment.
  • Intergenerational Responsibilities: The Impacts of Elderly and Childcare in Family Structures

Conferences

Past Presentations

Japanese Economic Association Spring Meeting (May 29, 2022, Yokohama). The 1st RCPD Research Seminar on Contemporary Economics (Tohoku University, 2022). ISER Seminar Series (Osaka University, 2023) .The 14th Vietnam Economist Annual Meeting (University of DaNang, 2023). Japanese Economic Association Fall Meeting (Kansai University, 2023). The 18th Macroeconomics Conference for Young Economists (Kyoto University, 2024). Joint workshop TU Research Center for Policy Design and Sophia Institute for Human Security (Tohoku University, 2024).

Upcoming