Interview with Senior Research Fellow Ishizuka Fumiaki: Considering Asia’s Aging Population by Analyzing Data on Individuals and Households

What role can the analysis of data on individuals and households play in addressing the issue of Asia’s increasingly aging population? Together with the Asian Development Bank (ADB) and Asian Development Bank Institute (ADBI), the JICA Ogata Sadako Research Institute for Peace and Development (JICA Ogata Research Institute) held an Asia region conference to address this question. Senior Research Fellow Ishizuka Fumiaki who helped organize the conference shared his thoughts on the discussion in the conference.

First was a research paper by Professor Sang-Hyop Lee’s group from the University of Hawaii at Manoa which analyzed health and employment data of elderly people in China and South Korea. They calculated roughly how many elderly people were employable in terms of health, or in other words, not working for one reason or another despite being healthy enough to work. Then, they estimated how much it would contribute to economic growth if all of these elderly people were to work. As a result, they determined that the added employment of these elderly people in China and South Korea would not contribute much additional economic growth relative to other developed countries. This implies that the productivity of elderly people in both countries is relatively low, leading to the suggestion that efforts to improve their productivity such as vocational training might be needed. Additionally, they found that while wealthy elderly people in China’s urban areas retire rather early, elderly people in the country’s rural areas tend to continue working as long as their health allows, regardless of whether or not they are receiving pension. In light of this, they suggested that it would be important to correct the gaps in the pension system between cities and rural areas and to provide a better safety net. Concerning the issue of how to curb the decline of the labor force as society ages, I thought this paper clearly showed how the same remedies from other developed countries might not be effective in Asia. You could surmise that the depth and breadth of pension coverage should be improved in Asian countries where the rate of pension system participation is low, while concurrent efforts to improve labor productivity are also needed.

The paper by Assistant Professor Jayash Paudel of Boise State University in the US was also quite interesting. He uses individual and household data to examine the effects of cash transfer programs for the elderly in Nepal on their economic activities. Unfortunately, the cash payments from these programs are not leading to asset purchases or food consumption by elderly people, and for women in particular it was found that these payments have the reverse effect of actually causing them to eat less. He also showed that receiving these payments caused household sizes to increase. This hinted that increases in household income due to cash transfer payments to grandparents have led to larger households with the births of more grandchildren, increasing expenses for these grandchildren. To meet the increasing expenses, grandmothers who regularly take care of the grandchildren are themselves eating less. I think it is important to realize from the perspectives of national governments and donors such as JICA, that cash payments to the elderly are not always accomplishing the original policy aims to improve health and nutrition for the elderly, depending on the circumstances. This also reminded me how important the design of these programs can be, which includes taking gender differences into consideration.

Third was a paper about improving the capacity of local governments in charge of selecting recipients of cash transfer programs in Bangladesh, presented by Professor Atonu Rabbani (University of Dhaka and BRAC James P Grant School of Public Health). The researchers performed a field experiment to determine whether a state-capacity building intervention consisting of a training and provision of data of people in the target group could improve the selection of beneficiaries for the Old Age Allowance, the national social pension scheme in Bangladesh. In other words, the researchers examined whether the intervention improved the ability of local government representatives to select those who are more eligible to receive the benefit. Although the knowledge level of local government representatives on average increased, the research did not find any improvement in selection performance as measured by eligibility and poverty indexes. However, the selected beneficiaries tended to be poorer in terms of land ownership and individual income, particularly for areas where full interventions were in effect. This called for further investigations and suggested how extraordinarily difficult the task of selection is, especially when the selectors need to juggle many different eligibility and priority criteria while facing a high number of applicants with limited resources at their disposals. Further, illegitimate payment of “fees” during the application process can also influence the selection of beneficiaries. Selection of recipients is always an issue with social programs. I think it was extremely beneficial for JICA to realize that to be effective, considerations must also include the systems and budgets of the programs, and factors such as culture and social practices, in addition to improving the capacities of the agencies and administrative staff of the national governments of partner countries.