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Aging societies are becoming a major challenge to economic systems, as population trends in many countries are moving toward an aging society. The decline in the labor force and the increase in government expenditures have significant impacts, particularly on developing and low-income countries that bear the greatest burden of these challenges. But how exactly do aging societies create these economic pressures? This article explores the key issues.
ASEAN is entering a demographic transition toward an aging society. According to data from the ASEAN Secretariat, in 2000, young people accounted for 41.9 percent of the region’s population, but by 2023 this proportion had fallen to only 32.1 percent. Meanwhile, the share of older persons and the working-age population increased to 60.1 percent, reflecting a clear demographic shift toward an aging population.
Among ASEAN member states, Singapore and Thailand are entering a full-fledged aging society. Singapore already has more than 25 percent of its population aged over 65, making it a super-aged society. Thailand is also moving toward this status, with data from the National Statistical Office indicating that in 2024 the country already had more than 14.3 million people aged over 60, equivalent to 20 percent of the population. Within the next five years, Thailand is expected to become a fully aged society.
If a country fully enters an aging society, what will happen? Research by Nicole, Kathleen, and David indicates that aging societies reduce GDP growth rates. A 10-percent increase in the population aged over 60 results in a 5.5-percent decline in GDP per capita. One-third of this impact comes from slower employment growth, while the remaining two-thirds comes from a decline in labor productivity.
Similarly, studies by the Department of Older Persons show parallel trends, emphasizing labor-related impacts. The research indicates that the rising share of older persons, which is not aligned with the birth rate, increases future risks of labor shortages. The working-age population continues to decline and is expected to fall by around 15 percent by 2040, which will significantly affect the economic sector.
In addition, challenges regarding health and fiscal burdens have emerged—such as healthcare expenditures and government budgets for old-age allowances, which many countries use as social welfare measures. As the number of older persons increases and national income growth slows while expenditures remain high, this situation becomes an urgent policy challenge requiring immediate attention.
At the regional level, ASEAN’s demographic trends are moving similarly, characterized by a rising number of older persons and a continuously shrinking labor force. Many countries are beginning to introduce policies to mitigate these impacts and prepare for the transition. One example is the development of long-term care (LTC) systems to support older persons at higher risk of illness. Some countries are also considering raising the retirement age to ease labor shortages and maintain long-term productivity.
The concept of Active Aging is an important framework that views older persons as valuable human resources rather than social burdens. Older persons are repositories of knowledge and intellectual labor who can contribute to economic development. Studies by the National Statistical Office reveal that 51.1 percent of older persons remain healthy and capable of working, while 43.5 percent continue to work to support their households. This reflects the potential and importance of this demographic group in today’s economic and social systems.
Given the shifting social context, countries must develop policies and measures that appropriately support older persons so they are not seen as burdens and can fully contribute their value as an important resource.
In summary, aging societies are placing pressure on economies at both national and regional levels. As populations age and the working-age population declines, countries must prepare to address upcoming impacts while promoting the full utilization of older persons as a productive resource. Older persons should not be seen merely as retirees who have completed their roles; rather, they should be recognized as key contributors who can continue driving economic and social development. This approach will help alleviate the impacts of aging societies and labor shortages.
Author:
Mr. Woraphat Ditpan
Researcher
International Institute for Trade and Development (ITD)
www.itd.or.th
Publication: Bangkok BIZ Newspaper
Section: First Section/World Beat
Volume: 39 Issue: 13046
Date: Wednesday, Dec. 3, 2025
Page: 8 (bottom)
Column: “Asean Insight”
