For quite some time, rapid societal aging has been a serious and unavoidable problem for many countries. The resulting population changes have caused various socio-economic problems, including a decrease in economic growth and an increase in the burdens
the government must shoulder to provide the same level of social welfare. The fact stands that governments are finding it difficult to find solutions to these issues. As of 2011, Korea’s elderly (people over 65 years of age) accounted for 11.3% of the total population, which is lower than the OECD average of 15.3%. This figure alone might suggest that the problem is not that serious. However, it is a different story when we look at the pace of societal aging in Korea. In the four decades that have passed since 1970, the proportion of Korean elderly people has increased by 3.7 times, which is the greatest change seen thus far by OECD member countries. It is instructive to compare this statistic with other major advanced countries. The elderly population in Italy (where the proportion of elderly people already surpasses 20%, making it a post-aged society) has only risen by 1.9 times. The increase in Germany was 1.6 times, and the OECD average was 1.5 times. Essentially, while OECD countries are aging by one year, Korea is aging by 2.4 years. Korea entered the ranks of aging societies (7-14% elderly) in 2000 and is expected to become an aged society (14-20% elderly) in 2018. That means it will take Korea only 18 years to reach a level that took 115 and 72 years in France and in the United States, respectively, demonstrating just how rapidly premature aging is taking place in Korean society.

  One of the biggest problems that a prematurely aging population creates for the Korean economy is that the reduction in the workingage population (15-64 years old) and the increase in the average age of workers leads to a decrease in labor productivity and consequently pulls down the nation’s competitiveness. The driving force behind the high level of economic growth in Korea since the 1960s has been the continuing increase in the working-age population. While the baby boom generation in Korea (1955-1963) only represents 15% of the total population, or 7.1 million people, their imminent retirement coincides with a sudden vacancy in the labor market, which is expected to have a negative effect on the entire economy. Korea’s working-age population is projected to begin decreasing after peaking at 73.0% in 2015, rendering Korea’s future even gloomier. While there are six working-age people available to care for each elderly person today, this number isslated to drop to 2.6 in 2030 and to 1.4 in 2050, there by magnifying the social burden of each individual young person. Furthermore, while the average age of employees in Korea only increased by 4.3 years from 40.3 to 44.6, between 2000 and 2013, the average age of workers in the manufacturing industry went up by 7.4 years, from 40.9 to 48.3, during the same period. Considering that the Korean economy is dependent on exporting products made by the manufacturing sector, the premature aging of the population could result in a very serious situation.

  Meanwhile, it is possible that the growth gap in regional economies could be aggravated by the decrease in labor productivity caused by the population changes of societal aging. In Korea, there appears to be a tendency for the population increase and decrease of any given
region to be fundamentally determined by migration rather than birth rate, and the migration of working-age people has a significant influence on regional economic growth. In areas where there is a high degree of societal aging because of the migration of young and working-age people to cities, this functions as a direct factor in the stagnation of regional economic growth because of the decrease in labor productivity. In regions containing a greater influx of workingage people, the increasing labor force results in higher productivity. As illustrated above, as changes in the working-age population of each region continue to build up, it is very likely that the growth gap between regions will not converge but rather increase with the passage of time. In regional economic growth, the spread effect (whereby areas of growth have a positive effect on underdeveloped areas) and the backwash effect (whereby areas of growth exacerbate the disparity by absorbing capital and workers from underdeveloped areas) are both in play, meaning that the growth gap is determined by which of these two effects has a greater impact.

  The shift in income levels of various regions in Korea resulting from fluctuations in the working-age population illustrates how these two factors affect the growth gap.

  From this perspective, there is an urgent need to devise policy measures to maintain the impetus for growth and to minimize the negative effects of rapid societal aging on the economy, both on a regional and national level. In this paper, a variety of statistical analyses were employed to determine the effect that societal aging has on regional economies. More specifically, the current status of OECD member countries and regions was analyzed based on indices closely related to societal aging; the effects of migration on societal aging and the correlation between migration and regional economic growth were also analyzed. In addition, these analytical results were used as the basis for proposing seven policy tasks and eighteen improvement measures suggesting the direction to be taken to address societal aging. Generally speaking, there are two basic strategies for counteracting societal aging. The first is slowing down societal aging itself by increasing the birth rate and reducing the movement of young people to other areas. Second is minimizing or compensating for the negative economic effects of societal aging, which could involve improving labor productivity, making use of idle human capital, and increasing productivity by introducing new factors of production.
  Among the basic strategies for counteracting societal aging, this paper focuses specifically on the area of industrial economy, proposing specific ways to improve related policies. In particular, in order to ascertain ways to minimize and compensate for the effects of societal aging (the second basic strategy), a variety of analyses these analyses, this paper proposes 18 specific ways to devise better policies, including training creative workers and increasing innovative activity as means of improving labor productivity, improving the female economic participation rate and utilizing the elderly work force as ways of putting idle capital to use, and improving the capital equipment rate while introducing foreign workers as a means of
introducing new factors of production.

  Such measures are proposed within the framework for achieving a creative economy, which is the key economic policy of the current Korean government, and it is expected that these measures will contribute to improving the efficiency of government policies. In addition, the policy proposals in this paper adopt a legal and institutional perspective in their approach to societal aging in order to increase the possibility that they will be used not only as long-term
strategies for addressing societal aging but also in current real-life policies. Consequently, this paper can be used as a basic reference material when the government sets up relevant policies in order to address premature aging of the population.